1. Facilitation of Fund Supply and Enhancement of Equity Capital

(1) Facilitation of Fund Supply

In order to facilitate fund supply for small and medium enterprises (SMEs), the State shall strengthen the functions of governmental financial institutions, develop credit enhancement projects, direct private sector financial institutions to conduct proper lending for SMEs, and take any other necessary measures.

- Providing loans from three governmental financial institutions

Japan Finance Corporation for Small Business, National Life Finance Corporation and Shoko Chukin Bank offer low-interest loans to SMEs according to their purposes of fund use.

- Supplement credit capability of SMEs with the credit insurance system and credit guarantee system

Both systems aim to contribute to smooth fund procurement for SMEs through guarantee by the Credit Guarantee Corporation for their loan of business funds from financial institutions.

(2) Enhancement of Equity Capital

In order to enhance equity capital of SMEs and help strengthen business fundamentals thereof; the State shall develop systems for facilitating investment in SMEs, optimize tax burdens, and take any other necessary measures.

- Investment by Small and Medium Business Investment and Consultation Companies.

Small and Medium Business Investment and Consultation Companies (private companies mostly owned by local governments and financial institutions) underwrite new shares, CBs and warrant bonds issued by a corporation with capital of not more than ¥ 300 million, in general

- Countermeasures to enrich equity capital based on the Limited Partnership Act for Venture Capital Investment.

The Limited Partnership Act for Venture Capital Investment has been established to legally secure the limited liability of limited partners that have no involvement in the business operations of investment business partnerships, so that a broad range of investors supply fund.

(3) Taxation Systems Related to SMEs

These systems include reduction in corporate income tax and other taxes, various deductions from income tax and others, special measures for promoting investment in equipment, and facilitation of business succession, etc.