The government may privatize the Development Bank of Japan as part of an attempt to reorganize eight governmental financial institutions, government officials have said.
But the government is split over the decision because the Finance Ministry, which oversees the bank, thinks the state should have a stake in it.
The debate is expected to continue until the end of the month.
The DBJ provides long-term financing to projects that promote economic development and quality of life in Japan.
The government is reviewing eight financial institutions in accordance with a reform initiative launched by Prime Minister Junichiro Koizumi. The initiative is aimed at letting private financial institutions play a greater role in Japan's economic growth by cutting the number of governmental lenders and thus the outstanding balance of loans.
Koizumi wants the lenders to be consolidated into a single institution.
The government is expected to combine National Life Finance Corp., Japan Finance Corp. for Small and Medium Enterprise, and Agriculture, Forestry and Fisheries Finance Corp. into one public lender for small and midsize firms as well as individuals.
Among other government-affiliated lenders, the Japan Bank for International Cooperation may be stripped of its key business of extending long-term, low-interest loans to developing countries.