TOKYO: Only 37 percent of special Japanese government loans provided to needy people during the COVID-19 pandemic have been paid back, according to welfare ministry data compiled recently.

Of roughly 104,733 million yen in such special loans that fell due by the end of 2023, about 38,768 million yen was repaid, while the rest, some 65,965 million yen, has not been paid back, the data showed.

Local social welfare councils are urging those with overdue loans to repay the money by visiting them or sending documents to their homes. In many cases, such loans have not been recovered, however, due mainly to the borrowers having been unable to rebuild their lives even after the pandemic.

Among these recipients were people who had been facing financial difficulties even before the novel coronavirus outbreak, such as multiple debts, an official of the ministry said.

The special program, targeting people who lost jobs or saw income decreases due to the fallout of the pandemic, was in place between March 2020 and September 2022, providing up to 2 million yen in interest-free loans per household through prefectural social welfare councils. Repayment began in January 2023.

A total of 1,443.1 billion yen was provided under the special loan program, according to the ministry.

Low-income households were exempted from repayment. According to the Japan National Council of Social Welfare, the number of loans excluded from repayment obligations totaled 467,688.61 million yen as of the end of March this year.

Repayment has also been waived for dead recipients.

By the end of June 2023, a total of 109 people were exempted from repayment in Shiga Prefecture following their deaths, according to the western prefecture’s social welfare council.

Of them, 16 killed themselves. The data attests to the dire situation of loan recipients, Ikumi Taniguchi, a senior official of the council, said.

When the special program was introduced, the government used a simple screening method for applicants so that loans would be provided quickly.

“The result was that applicants’ repayment abilities were not fully checked,” an official of the Japan National Council of Social Welfare said.

The welfare ministry plans to continue providing people with overdue loans with advice and consultations on finding jobs to facilitate repayments, while reviewing the effects and problems of the special loan program.

JIJI Press