Message from the Governor & CEO

TANAKA Kazuho Governor & CEO Japan Finance Corporation

Roles and Mission of Japan Finance Corporation

Japan Finance Corporation is a policy-based financial institution that carries out financing within a scope determined by applicable laws and budgets, which are based on government policy for SMEs and micro/small businesses, agriculture, forestry, and fishery policy, etc., with the aim to complement financing carried out by private financial institutions.

JFC's primary mission is to meet the capital needs, including small sums, of those starting new businesses, those dealing with natural disasters or a change in business environment, and to serve the capital procurement needs of Japan's SMEs and micro/small businesses and those engaged in business in the fields of agriculture, forestry, or fisheries.

Responses to the Spread of COVID-19

We have responded to customer needs with a deep sense of our mission as a policy-based financial institution to "connect" policies and those involved in business.

Due to the unprecedented threat from the protracted impact of COVID-19, Japan is currently confronting previously unseen economic and social crises. Many businesses continue to face extremely challenging circumstances.

Since we established special consultation services in January 2020, we have made decisions for approximately 1.06 million COVID-19 related loans with a value of 18 trillion yen through the end of June of this year. This is the largest operation in the history of Japan's policy-based finance. In addition, in August 2020 we began handling COVID-19 Hybrid Subordinated Loan Program in order to bolster the financial foundations of SMEs and micro/small businesses that have been impacted by the COVID-19 pandemic. As of June 30, 2022, a total of 6,000 loan decisions were made worth a total of 900 billion yen.

Inquiries on financing support related to the COVID-19 pandemic have fallen compared to the peak. However, in addition to the ongoing pandemic, other factors such as rising crude oil and commodity prices, growing international tensions, and more, have led to a situation where the future outlook remains unclear. Still, we are stepping up collaboration with private financial institutions, Chambers of Commerce and Industry, Societies of Commerce and Industry, and others, working with all supporting organizations to prop up businesses in order to provide them with effective financial support, as well as to bolster and restructure their financial foundations.

Future Measures

In line with its role as a policy-based financial institutions for emergencies, JFC supports businesses affected by the COVID-19 related crisis, reconstruction from the Great East Japan Earthquake and other earthquakes, typhoons, and other natural disasters, and consistently implements safety net functions in any situation.

Additionally, with a view to the post-COVID-19 world, we continue to focus our efforts on supporting the Strategic Fields of Growth, including support for start-ups and new business, business succession, and new expansion for the agriculture, forestry, and fisheries businesses.

(Support for start-ups and new business)

JFC is actively committed to supporting start-ups and new business and facilitates the launch of start-ups, which are driving force behind innovation. Some of these companies have later been listed on the stock exchange, taking on a leading role in the Japanese economy. Drawing on the experience and knowledge gained through the present time, JFC continues to provide support for start-ups and new business in a wide array of fields.

(Support for business succession)

In Japan, supporting business succession is a critically important issue exacerbated by problems such as the aging of management personnel and the prolonged COVID-19 pandemic. To provide support for business succession in fields critical to local regions, we will enhance our information—collecting abilities and identify key needs—acting as a bridge linking local hopes to the next generation. We will also collaborate with relevant organizations to offer effective consulting including business matching.

(Support for new expansion by agricultural, forestry, and fisheries businesses)

In recent years, Japan's agricultural sector has begun to overcome the general public perception that it is small and unprofitable. As the implementation of smart agriculture and its expansion into global markets progress, there is now a real possibility that agriculture will serve as a growth engine for regional economies. With a view to remaking agricultural, forestry, and fisheries business into growth businesses, JFC collaborates with relevant organizations, including private finance institutions, to support the agricultural sector.

Closing

To contribute to regional revitalization, JFC will carefully ascertain the circumstances surrounding regions and businesses and adopt a bird's-eye perspective of regions to work toward solving their problems, taking into consideration the changes in business environment caused by COVID-19. While doing so, we will perform our function of connecting the various relevant organizations such as private financial institutions while utilizing our nationwide network of 152 branches to deepen collaboration with local communities.

In order to provide high-quality services regarding policy-based financing, while implementing the above measures, JFC will exercise appropriate risk-taking functions and make every effort to provide expert consulting. To reinforce our policy-based financing functions, we will work to streamline business and increase operational efficiency in the aspect of our organizational management, including stepping up digitalization.

In addition, through assistance programs for business and by doing our part for the community, we are working to achieve the SDGs and an all-around more sustainable society.

We sincerely hope for your further understanding and support in the future.

July 25, 2022

TANAKA Kazuho
Governor & CEO

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