Japan’s PM Abe unveils zero-interest loan scheme for small firms hit by virus

Japan's Prime Minister Shinzo Abe speaks at a debate session ahead of July 21 upper house election at the Japan National Press Club in Tokyo on Wednesday. Photo: REUTERS/Issei Kato. Sketched by the Pan Pacific Agency.

TOKYO, Mar 8, 2020, Kyodo. Prime Minister Shinzo Abe said Saturday the government will launch a scheme to extend zero interest loans with no collateral to small and midsized companies reeling from the new-coronavirus turmoil, Kyodo News reported.

The state-owned Japan Finance Corp. is among entities that will join the program aimed at helping small businesses gain access to financing and stay afloat, Abe said at a meeting of a government task force on the coronavirus response.

“We will make our utmost efforts to keep jobs and make sure companies can maintain their business,” Abe said during the meeting at his office.

The government will also financially support parents who have been forced to take time off to look after their children due to Abe’s abrupt decision to close all schools from last Monday to the start of the new school year in April.

Such parents will receive money to make up for any shortfall in their income due to their time off from work, Abe said. The government will also pay for programs to take care of children during the period of school closure.

Abe instructed Cabinet members at the task force meeting to step up work to compile a fresh emergency package on Tuesday. It will be aimed at mitigating the negative economic impact, strengthening measures to support parents who have school-age children and preventing the spread of the virus.

Abe has said he hopes to use 270 billion yen ($2.6 billion) in a state reserve fund for the current fiscal year through March “as much as possible.” The initial package announced in mid-February totaled 15.3 billion yen.

After coming under fire for his slow crisis response, Abe decided to shut schools and call for big event cancellations and postponements to reduce group transmission risks. From Monday, Japan will restrict travel from China and South Korea.

The Japanese economy is feared to enter a recession after it shrank in the October to December quarter as a consumption tax hike dented private spending.

The total number of infections has topped 1,000 in Japan, including around 700 from the Diamond Princess cruise ship quarantined for two weeks in February near Tokyo. The death toll stands at 12.

Globally, the outbreak that began late last year in China’s central city of Wuhan has led to over 100,000 infections.

Abe is seeking to have special legislation, effective for two years, enacted by next Friday, enabling him to declare a state of emergency if needed.

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