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Geisha loan application: Accepted

How conversation specialists find way into Japan's circle of trust

Kikuno Kashima got a geisha loan from a financial cooperative. She used it to open her own restaurant in Tokyo.

TOKYO -- It's not easy getting a business loan in Japan, where big banks often base final decisions on reams of data.

So what's a small hotel owner who wants to expand or a geisha who needs more kimonos to do when there is not enough data to vouch for them?

Today, we provide an answer -- start with a smaller lender.

Some new loan-makers are dabbling in tech to help them gauge a potential borrower's creditworthiness.

Recruit Holdings, the big staffing and media conglomerate, plans to start extending business loans to small and midsize enterprises through a subsidiary in September. It will first target operators of small hotels and other accommodations that list on, a Recruit booking subsidiary.

For potential borrowers it finds here, the lender will set artificial intelligence loose on the trove of data that the booking website serves up, like how busy the applicants' inns are.

The holding company has noticed that a number of small businesses struggle to obtain the loans that would finance their expansion plans. "We want to swiftly respond to financial needs when a business faces an emergency," a Recruit representative said. The new lender will try to shorten the screening process so that it can offer a loan several days after receiving a request.

Japan Net Bank, an online lender, also uses technology to sift through big data when screening potential borrowers. Partnering with freee, a Tokyo-based online accounting software provider, the bank recently began using AI to quickly pick up and analyze data concerning potential borrowers' financial situations as well as how well their businesses are doing.

In most cases, successful applicants receive loan offers within several days.

Meanwhile, one regional cooperative seems to value a more traditional means of assessing a potential borrower's reliability -- asking around the community.

Kikuna Kashima, a Tokyo-based geisha entertainer, used a loan from Dai-ichi Kangyo Credit Cooperative when she wanted to open her own eatery in Tokyo's Asakusa district about two years ago.

Large banks did not respond well to her requests. But a friend introduced her to the cooperative, which "prudently listened to my needs and eventually offered me a loan," she said.

Dai-ichi Kangyo Credit provides "community loans" that it sees fitting specific needs. Its geisha loans -- yes, it really has a financial product meant specifically for these entertainers -- are designed to help these women buy new kimonos or start businesses. Since October, when it began offering geisha loans, the cooperative has signed off on about 50 million yen ($459,770) worth of these artisan instruments.

Rather than banking on AI, the cooperative relies on its webs of human relationships. Of course, prospective borrowers are interviewed and their business plans examined. But the cooperative also makes use of its wide customer network by asking around for endorsements.

Essentially, successful borrowers are brought into a circle of trust.

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