Research on the Sustainability of the Money Lending Market in View of the Infiltration of Loan Sharks (Yamikin)

Abstract

Since the money lending business law, which includes extremely strict regulations, was revised in 2006, it is said that the money lending market has remained stable without causing major social problems. On the other hand, as feared since the revision of the law, loan sharks (Yamikin) begun to actively operate behind the scenes in the official money lending market, and their criminal methods are becoming more and more sophisticated.

In recent years, various new types of loan sharks disguised as factoring are growing as alternatives to money lending functions. For example, since around 2018, the social damage caused by Payroll Factoring (Kyuyo-Factoring), a new type Yamikin that provides funds to consumers with salary income, has been reported in the media. So, in March 2020, the Financial Services Agency of Japan issued a nonaction letter to the effect that Payroll Factoring’s scheme is equivalent to the money lending business disguised as fixed wage receivable transfer. As a result, many Payroll Factoring firms have exited from the market.

However, some of the Payroll Factoring firms that had withdrawn from the market have evolved the know-how of credit check and collection cultivated on Payroll Factoring’s business into new Yamikin’s business-schemes. Representatives of these are the even newer types of loan sharks known as Deferred Payment Cashing (Atobarai-Genkinka) Yamikin, and Advance Payment Purchase (Sakibarai-Kaitori) Yamikin. Today, this phenomenon emerges as social problems and is not only gradually increasing the difficulty of police crackdowns, but also often taken up as a theme in the Diet of Japan.