Regarding the government-affiliated financial institution "Shoko Chukin Bank", the government decided at the cabinet meeting on the 10th to privatize all the shares held by the government.
At the cabinet meeting on the 10th, the government decided on a bill to partially revise the Shoko Chukin Bank Law.
The policy of complete privatization of the Shoko Chukin Bank was decided in 2006, but it was repeatedly postponed due to the Lehman shock and the Great East Japan Earthquake. became.
For this reason, the revised bill states that system reforms will be carried out to eliminate the harmful effects of semi-governmentalism and to enable flexible support for small and medium-sized enterprises. We plan to sell it to small businesses and chambers of commerce nationwide within a year.
After privatization, they will be allowed to expand their business to the same extent as other financial institutions, such as by making companies that support the expansion of sales channels for borrowers into subsidiaries.
Furthermore, we have decided to weaken the involvement of the government, such as changing the appointment of representative directors, which required government approval, to a notification system. We have decided to leave the "corresponding loan" function.
The government intends to pass relevant bills during the current ordinary session of the Diet.
What is the background to privatization?
The Shoko Chukin Bank is a government-affiliated financial institution established in 1936, and more than 90% of its loan balance is for SMEs.
A major feature is that it has a function called "crisis response loans" that lends to small and medium-sized enterprises whose cash flow has deteriorated in the event of a disaster.
The decision to fully privatize the Shoko Chukin Bank was made in 2006 under the Koizumi administration, but due to the financial crisis of 2008 and the Great East Japan Earthquake in 2011, we had to deal with this loan, so it was postponed twice. it was done.
However, in 2016, more than 5,500 cases of fraud, such as falsification of application documents, were discovered in connection with these loans.
A third-party committee that investigated the cause of the fraud pointed out that "there were excessive quotas and pressure on the site."
This injustice triggered the establishment of a national panel of experts to examine how the Shoko Chukin Bank should be organized.
In 2018, we put together a proposal that we should decide whether full privatization is possible after four years, stating that it is necessary to change the management structure that depends on the state and start over.
After that, Mr. Masahiro Sekine, who had worked at a major bank and was managing director of Prince Hotel, was appointed president, actively provided loans for business revitalization, and embarked on management reforms such as abolishing sales quotas.
And last month, a government study group compiled a report stating that all stocks held by the government should be sold and privatized while leaving "crisis response loans" to support the cash flow of small and medium-sized enterprises. .