Research on the Background and Policy Significance of Translation Lending Service's Penetration
2017 Volume 4 Pages 7-17
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2017 Volume 4 Pages 7-17
The “Labor Market Analysis Report”, published by the Health, Labor and Welfare Ministry in January 2015, concluded that the major reason for the recent increase in non-regular workers is that more self-employed workers are closing their businesses and choosing to be employed as non-regular workers. We cannot place full responsibility for the increase in bankruptcies of the self-employed on the MLBL impact alone. However, we also cannot deny the probability that the law revision accelerated the closing of businesses by SMEs due to financing difficulties.
December 2016 had marked 10 years since the revision of MLBL. The cap rate reduction is still intensifying the rigidity in financing of SMEs. The ratio of business commencements to withdrawals in Japan compare quite unfavorably to those of other advanced countries. One of the reasons must be that small lending, such as unsecured and conventional lending, is not functioning.
Meanwhile, FinTech has been gaining attention as a new financial instrument. It is now achieving rapid growth in the U.S. Also, Japan tries to move toward its implementation. There are various business models of FinTech services that have been taking the lead, including transaction lending service for SMEs in the U.S.. If these FinTech services are to be utilized as growth strategies in Japan, the urgent task would be to politically first set up the FinTech market as a provider of unsecured and conventional loans for SMEs.
However, Japan's FSA is not interested in relaxing interest rate regulation in financing services on FinTech, including transaction lending service. On the other hand, the Liberal Democratic Party and the New Komeito Party, which are the government parties, show a strong interest in transaction lending and suggest deregulation in its service area. Therefore, this paper views both the MLBL impact for SMEs and the current situation on transaction lending service's market in Japan and analyzes the significance that transaction lending service is attracting policy attention in the legislature, and its reason.
