The government is considering providing small businesses with an unspecified amount of new credit guarantees starting from the beginning of fiscal 2000 in April to promote creation of new enterprises, vice trade minister Osamu Watanabe said Monday.

The new scheme is to replace the current special credit guarantee worth 20 trillion yen, which was set up by the government last October to help finance small and medium-size companies faced with fundraising difficulties.

Speaking at a regular press conference, Watanabe said the current scheme should expire at the end of March as planned, with more than 3 trillion yen of guaranteed credit left unused.

While recognizing criticism that such a credit guarantee may have simply prolonged the life of impotent businesses and caused corporate moral decay, Watanabe said the government is now studying ways to make better use of its guaranteed credit through such means as backing startup costs for new ventures.

As for the small number of borrowers expected to have difficulty repaying capital borrowed last October under the guarantee scheme's special one-year grace period, Watanabe said the Small and Medium Enterprise Agency will deal with the firms on a case-by-case basis, assuring that the problem would not turn into a catastrophe.