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DBJ to reduce lending rates to firms contributing to local economies

May 24, 2014

The Development Bank of Japan will lower interest rates on loans to companies that create jobs and hire women and the elderly, in order to spur economic growth in struggling regions, sources close to the matter said Saturday.

The move is aimed at boosting local economies where business activity is falling due to dwindling and aging populations, while the overall Japanese economy is on a recovery path under the so-called "Abenomics" policies initiated by Prime Minister Shinzo Abe.

"It's necessary for regional economies to get better so as to reconstruct the whole country," said a DBJ official in charge of lending.

The state-run lender will decide the preferential lending rates on a case-by-case basis by evaluating each company, according to the sources.

The evaluation standards will also include if companies make use of local tourist resources or materials in their businesses, and whether they try to attract personnel, materials and funds from other areas of Japan as well as from abroad for regional revitalization, the sources said.

Under a program launched in 2010 to stimulate regional economies, the DBJ lent a total of 23.7 billion yen in 63 cases during the past year to March, and plans to double the number of loans to 120 and the total amount lent to 50 million yen this financial year.

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Source: Japan Economic Newswire

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