ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon Print

COVID pushes debt at small Japanese companies to 10-year high

Bankruptcies feared on the rise as grace period for loans to end in 2022

Companies in Japan are borrowing more but earning less, setting up for what might be a tsunami of defaults.

TOKYO -- Japan's small and medium-sized enterprises (SMEs) are facing financing difficulties, as the burden of repayment ratio -- calculated by dividing debt balance by annual profit from core businesses -- soared at the end of March to levels not seen since immediately after the 2008 global financial crisis.

"I don't think I can survive the winter if COVID spreads again and forces me to cut back my business," said the operator of a grilled chicken restaurant near Kanda Station in Tokyo.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more