Nonbank lending rate limit may change

The Finance Ministry will consider lowering the upper limit on lending rates for nonbank financial institutions, ministry officials told representatives from the sector Wednesday.

The argument for stronger regulation has been raised because the number of individual borrowers going bankrupt is increasing. Opponents say lowering the ceiling, which is set at an annual rate of 40 percent, would encourage underground financing.

The number of individual bankruptcy cases came to a record 71,300 last year, up 26 percent from the previous year. At the meeting with nonbank representatives, ministry officials also explained a bill recently submitted to the Diet that would permit nonbank financial institutions to issue bonds as a means of raising funds. It is intended to be a part of the financial system reform.