TOKYO -- Some 468.5 billion yen (about $3.1 billion) of the 1.44 trillion yen (approx. $9.45 billion) in interest-free loans extended by the Japanese government to needy households during the coronavirus pandemic is unrecoverable, Japan's Board of Audit has found.

The total unrecoverable amount reportedly may be higher, as the government is continuing to write off loans for households that remain low-income, and around 140,000 applications for loan forgiveness are pending.

The special loans consisted of temporary emergency microcredit and general financial aid for daily living needs, and households were able to receive up to 2 million yen (around $13,100) through the system. Compared to the government's existing "livelihood and welfare" low-interest loans, the criteria were more lenient, and a plan for financial independence was not required, prioritizing speed to respond to the crisis.

From March 2020 through September 2022, as the pandemic crisis deepened, the national government approved 3.82 million total applications for the loans. It began seeking repayments in January 2023. The Board of Audit found that 1.31 million cases had been forgiven, adding up to 468.4 billion yen as of the end of March this year.

According to the welfare ministry, which administered the program, while the government has begun to collect repayment for 1.91 million of the loans, totaling 661.4 billion yen (approx. $4.34 billion), deferrals due to reasons including unemployment and delinquencies have occurred. Furthermore, 140,000 repayment waiver applications had been made as of the end of August 2024.

From next January, repayment is planned to begin for 313.3 billion yen's worth (some $2.05 billion) of loans. However, a support office for the impoverished in the ministry's community welfare division said, "We do not know how much we will be able to collect. We would like to make sure we follow up with those who have been exempted from repayment."

(Japanese original by Toru Watanabe, Tokyo City News Department)