The Ministry of Economy, Trade and Industry plans to create corporate revival funds for small and midsize firms in each prefecture to support their rehabilitation efforts.
METI officials said Tuesday the funds will probably be financially backed by the public Japan Small and Medium Enterprise Corp., local financiers and local firms.
To curb dependence on public finances, the funds will receive more than 50 percent of their money from the private sector, the officials said.
The ministry plans to launch the first fund in Oita Prefecture in January.
Prefecture-based industrial revitalization committees were set up in March to help rehabilitate small and midsize companies, and 33 firms have already received support from them.
But as these committees can only approve rehabilitation plans, METI decided to launch the new corporate revival funds as a way to channel financial support to struggling firms, the officials said.
The funds will decide which firms they will support in cooperation with the industrial revitalization committees. They will then take over the firms' debts and urge them to improve their management as well as extend necessary loans to help with their rehabilitation efforts, the officials said.