As people in northeastern Japan devastated by the March 11 earthquake and tsunami are struggling to start their life anew, they are facing a big financial problem — that is — their debts. They are obligated to repay loans taken out in the past on what are now destroyed or damaged residences or business facilities; now they must take out new loans to build new residences or business facilities.
More than 200,000 buildings are estimated to have been destroyed or damaged in the disasters, most of them in Iwate, Miyagi and Fukushima prefectures. About half of them are unusable because they were fully or half-destroyed. Fishing boats, fisheries and other business facilities and agricultural machines were also destroyed or damaged.
Local financial institutions have an estimated outstanding balance of loans worth some ¥2.8 trillion. Many people have to pay back their loans even though they have lost property they had acquired after taking out the loans.
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