Japan consumer lenders brace for bad debt on 'revenge spending'

Higher interest rates drive up costs for industry used to cheap funding

Many new consumer finance customers are making up for shopping opportunities lost to the pandemic. (Photo by Yo Inoue)

YUKI NAKAMURA and MINORI SATO, Nikkei staff writers

December 11, 2023 08:04 JST

TOKYO -- An influx of new customers is increasing the risk of bad loans for Japan's consumer finance industry, while lenders face higher funding costs as interest rates rise.

Total provisions for loan losses at Acom, Aiful and SMBC Consumer Finance grew about 30% on the year to roughly 120 billion yen ($817 million) for the first half of the fiscal year ending March 2024.