The Journal The Authority on Global Business in Japan

Ministry of Finance

The Ministry of Finance has become increasingly concerned over the growing number of unsecured loans provided by banks to individual credit card holders. As the ultra-low-interest environment for loans to businesses and for home mortgages continues, banks are increasingly putting emphasis on their credit card financing operations, which charge comparatively higher interest rates.

This is said to be resulting in excessive borrowing—beyond the ability to repay—with banks reportedly struggling to remedy the problem.

According to the Bank of Japan, at the end of 2016, the net amount of consumer financing via credit cards issued by domestic banks had grown some 10 percent over the previous year, totaling ¥5.4377 trillion. The figure has increased rapidly since the major deregulation introduced in 2011.

Some banks have overextended their lending, and individuals with no income have been able to borrow as much as ¥3 million without being required to provide an income certificate.

In the past, people in debt often borrowed from several sarakin (consumer finance companies), leading to serious debt problems. This led to revision of the law [in 2006] and the introduction of a credit limit system that banned loans exceeding one-third of the applicant’s annual income. These rules, however, have not always been applied strictly by banks.

Last year, the Federation of Bar Associations outlined its views in a bid to prevent excessive borrowing. This spurred the Ministry of Finance to commence investigation of card loan practices at major and regional banks. Hearings will be held regarding methods of disseminating information to bring an end to the problem. The current thinking is that banks might be encouraged to remedy the situation through self-imposed measures.

The ministry is requesting that members of the finance industry see it as their “fiduciary duty” to engage in banking operations that place priority on customers, since it will not tolerate measures that fail to protect customers.

Ministry of Internal Affairs and Communications

A three-way battle has emerged between the Ministry of Internal Affairs and Communications (MIC), the nation’s public broadcaster Japan Broadcasting Corporation (NHK), and commercial broadcasters regarding the simultaneous delivery of content over the air and on the Internet. While NHK seeks to initiate the service at an early stage, the commercial broadcasters, which are unprepared for full-scale initiation of such services, oppose its introduction, claiming that it “would widen the disparity [between them and NHK].”

While restraining moves by NHK, the MIC is considering ways of assisting the commercial networks provide simultaneous delivery. Meanwhile, some newspapers have jumped the gun with front-page headlines stating that “controls will be completely dropped for simultaneous delivery in 2019.” Media reports are nonetheless heating up.

At a press conference on March 2, new NHK President Ryoichi Ueda stressed that the simultaneous delivery of broadcast programming over the Internet was an “urgent issue,” indicating his intention to proceed with its realization. While commercial networks have voiced their concern that this will lead to the further expansion of NHK, Ueda—in a bid to assuage network complaints—has met personally with top management of the respective networks to convey to them the “importance of building relationships of trust based on continuous mutual understanding.”

In response to concern over potential NHK expansion, it appears that the MIC believes the commercial networks should develop their own infrastructure for simultaneous delivery. A council of experts has been exploring the issue since autumn 2016, and is expected to complete its report in FY2018. While commercial networks are less constrained by controls, a huge number of issues remain, including program copyrights and how to cover the cost of setting up the system structure. For this reason, smaller broadcasters, such as TV Tokyo and Tokyo MX, plan to make only a portion of their programs Internet accessible. NHK will inevitably emerge as leader of the pack, and the gap with the other companies will be evident.

Keizaikai magazine