The government plans to set a target year for halving the ratio of outstanding loans by eight governmental lenders to the gross domestic product, officials said Wednesday.

The target will be set under the policy of consolidating the Development Bank of Japan and seven other governmental financial institutions through closure and combination, they said.

The outstanding balance of loans by the eight lenders stood at 90.2 trillion yen at the end of fiscal 2004, equal to 17 percent of nominal GDP.

As a priority goal in Prime Minister Junichiro Koizumi's reform initiative, the government plans to halve the ratio to let private-sector lenders play a greater role to improve lending efficiency.

The target year will be part of a basic policy for the consolidation of the eight financial institutions to be worked out in November by the Council on Economic and Fiscal Policy.