Motohide Hashimoto takes office as Executive Director, Small and Medium Enterprise (SME) Unit of Japan Finance Corporation (JFC) as from 2014. He Graduated from Kyoto University (B.A., Economics) and joined Ministry of Finance (MOF) in 1983. In 2001, he was Director for Policy and Legal Division of Financial Services Agencies. In 2010, he was promoted as Regional-Commissioner of Sapporo Regional Taxation Bureau of MOF. Since 2012, Mr. Hashimoto was Managing Executive Officer, Micro Business and Individual (Micro) Unit of JFC.

1. Supporting innovative SMEs’
access to finance
- the Japanese example -
June 19, 2015
Motohide Hashimoto
Executive Director

2. Do you know ?
2

3. 0
100
200
300
400
500
600
(Trillion JPY)
Nominal GDP
Year Started
Year Listed
UNIQLO
1994
unicharm
1976
ASICS
1972
CASIO
1972
KYOCERA
1971
UNIQLO
1963
unicharm
1961
KYOCERA
1959
SONY
1958
GDP and Corporate Start-up Stage
3

4. Issues at the time of Start-ups
4
 Biggest Issue for start-ups “Raising Funds”
0% 10% 20% 30% 40% 50% 60% 70%
Raising funds
Various procedures
Acquiring management knowledge
Developing sales channels
Source: Survey of Business Startup Conditions commissioned by the Small and Medium Enterprise Agency
(November 2012; Mitsubishi UFJ Research & Consulting)
 In many cases, the founder’s own funds are used to start a business.
0% 20% 40% 60% 80% 100%
Own Funds
Financing / support from family and relatives
Private financial institutions
Government-affiliated financial institutions

5. 5-year follow-up survey of start-up companies
5
Percentage of borrowing from private financial institutions among start-up
companies
1/3 of SMEs use private financial institutions to raise funds for their
business activities from their third year in business, of which 60% of
SMEs receive guaranteed loans.
11,4
12,2
23,1
32,9 33,9 35,3
0
10
20
30
40
Time of Establishment1 Year 2 Year 3 Year 4 Year 5 Year
(%)

6. Start-up Support Provided by Credit Supplementation System
6
Japan Finance Corporation
- Provides special treatment of insurance related to business start up (with low
insurance premiums and no collateral demanded)
- Supports credit guarantee corporations that provide credit guarantees to SMEs
Credit Guarantee Corporation
- Provides credit guarantees to start-up companies
- Supports business start-ups through business management guidance
What kind of system is Japan’s Credit Supplementation
System?

7. Overview of Credit Supplementation System
7
JFC
CGCs
(51)
SMEs
National
Government
Local
Governments
Loans
Contributions
Guarantee Contract
Insurance Contract
Credit Insurance System Credit Guarantee System
Financial
Institutions
Guarantee Fee
Recovery
Subrogated Payment
Contributions
Insurance Premium
Payment of
Recovered Money
Insurance Money
Loss Compensation
Supervision
Contribution
Supervision

8. Credit Insurance System for Start-up Support (JFC)
8
Types of Insurable
Funds
Max Amount
of Insurance
Insurance
Coverage
Ratio
Insurance
Premium Rate
(p.a.)
Guarantee
Coverage
ratio
Special
treatment of
insurance
Business
start-up funds
25 million
JPY
80% About 0.40% 100%
Ordinary Insurance Business funds
200 million
JPY
70% 0.25%-1.69% 80%
 Purpose
• Support business founders, support new business activities for SMEs.
• Support productivity improvements through innovation, support failed
business operations who want to try again.
 Characteristics
Special treatment of insurance supporting business start-ups

9. Start-up Support Examples of CGCs
 As a core regional institution, carries out integrated execution of financial support
and business management support in collaboration with other support institutions
- Utilization of the manpower, expertise and experience of regional support institutions
- Lowering the possibility of bankruptcy through post-start-up monitoring
・Establishment of guarantee system for
start-up companies
・Program support for start-up planning
・Business follow-up after start-up
Start-up
companiesIntegrated start-up support
 Effects
Financial
support
Business
management support
CGCs
Commerce
organization
SME
Consultant
Regional
financial
institution
Local
government
9

10. 10
Start-up support provided by Credit Supplementation System
Issues and responses of the future
1. Network-building related to consulting for start-up support
- There is so much work to do for CGCs, but the number of workers are limited
 Start-up support should be provided efficiently using other
institutions (e.g. Commerce organization and SME Consultant)
2. Boosting the ability to judge start-up companies
- Start-up companies have no business history and financial statements and
often do not have adequate collateral
 A personal credit information database should be utilized to
enhance investigative abilities
Conclusion

11. Contact Information
Mr. Motohide HASHIMOTO
Executive Director
cncredit-insurance@jfc.go.jp
Mr. Hideaki HASHIMOTO
Deputy Group Chief
Credit Insurance Planning Department
cncredit-insurance@jfc.go.jp
hashimoto-hi@jfc.go.jp
11