Consumer finance companies, particularly midsize and small firms, are expected to restructure their operations as the government considers lowering the cap on consumer loan rates.

While major players such as Aiful Corp. and Takefuji Corp. have not yet announced any specific restructuring plans, smaller firms, including Shinki Co. based in Tokyo, and Earth Co. in Sapporo, have come up with plans to streamline.

Shinki said it will turn nine staffed branches into automated ones by the end of September, keeping employees at its two locations in Tokyo.

The company, which had about 190 staffed outlets nationwide at its peak, plans to serve customers through about 570 offices with no staff and some 40,000 automated teller machines at stores operated by its partners.

Earth, which provides consumer loan services only in Hokkaido and Miyagi Prefecture, also intends to eliminate staffed branches by the end of the month. It has asked some of its employees to take early retirement.

The government plans to eliminate the 29.2 percent ceiling on interest rates under the Investment Deposit and Interest Rate Law and leave the 15 percent to 20 percent cap under the Interest Rate Restrictions Law.

As moneylenders have mostly depended on the gray-zone interest rates between these two ceilings, which can be imposed if borrowers agree in writing, the elimination of the gray zone is expected to harshly affect their earnings.

Large lenders handle small-business loans and unsecured consumer loans, and will find it difficult to substantially reduce staffed outlets.

But the big firms will eventually have to follow the lead of their smaller rivals, reorganizing branch networks and cutting personnel, said a lending firm official.