Biz Loan Rates Down for 9th Year

November 14, 2017

Tokyo- Japan's average interest rate for lending to companies fell for the ninth straight year in fiscal 2016 that ended in March, Teikoku Databank Ltd. said in a survey report Monday.

The average lending state stood at 1.43 pct, down 0.10 percentage point from the previous year, the private credit research firm said.

Behind the continued downtrend are intensifying competition between financial institutions amid a falling population and the Bank of Japan's introduction of a negative interest rate in February last year, it observed.

According to the results of the first-ever survey on the matter by the research firm, all of the country's 47 prefectures saw the average business loan rate decrease in the reporting year.

Among the prefectures, Kagawa had the lowest rate, at 1.20 pct, against a backdrop of stiff competition between megabank groups and regional lenders reflecting falls in the number of major loan customers.

Aichi had the second lowest rate, at 1.22 pct, due to long-standing loan competition between many shinkin banks, followed by Wakayama, at 1.25 pct.

Meanwhile, Akita had the highest average interest rate, at 1.87 pct, followed by Okinawa, at 1.83 pct.

Teikoku Databank analyzed financial data of some 810,000 companies across the country. Jiji Press