Loans of 1.6 Trillion Yen in Total
Due to the disaster, affected people throughout the Great Earthquake-hit area had loans totalling to at least 1.6 trillion yen. In particualr, the Disaster Relief Loans for those who were financially weak, amounted to 130.87 billion yen (57,000 loanees). Life Rebuilding Loans amounted to 48.082 billion yen (26,365 loanees) and the double loans for rebuilding houses amounted to approximately 150 billion yen (15,000 loanees). The total of these loans reached 332.5 billion yen, which is much less than 800 billion yen which was invested in the then Sakura Bank from tax payers' money. Appropriation of public finances was totally misguided.
The five-year payment deferment period for the Disaster Relief Loans expired by the spring of 2000, when some problems began to be revealed. 67.9 billion yen (52%) had been repaid by the end of December, 2001. This Loan was based on "The Law concerning the Payment of the Disaster Relief Aid" (established in 1973). The national and local governments granted loans without collateral to households, whose houses were totally or partly collapsed or whose householders have been seriously wounded. A joint surety is required to receive the loan. Its interest rate is 3% per year, penalty is 10.75%, repayment is deferred for 5 years and then should be payed off within 5 years. Two thirds of the resources are financed by the national government and one third, by the local governments.
This loan was to be repaid in full in one payment, or by yearly or half-yearly installments. However, repayment in monthly installments or "small amount repayment" has been made available thanks to the efforts of Hyogo Congress for Rescue and Restoration (Fukko Kenmin Kaigi) which has organized counseling once a month since August, 2000 concerning the repayment. But a loanee who obtained a loan of 3.5 million yen must repay 3.8 million yen including the interest of about 0.3 million yen. Five years is too short for the people suffering from not only the aftermath of the earthquake but also recession to regain financial strength. Urgent request of the affected people for the provision of at least interest subsidy has been ignored by Hyogo prefectural and Kobe municipal governments.
According to the survey made by Fukko Kenmin Kaigi in April, 2002, more than 90% of about 280 people attending the counseling had "greatly reduced income" after the Earthquake, and 70% of them are forced to choose "small amount repayment". Moreover the number of unemployed people has increased by 3.7 times. Immediate interest subsidy should be actualized, which can be done by the application of a "reconstruction fund" project, and further steps should be taken to enlarge the scope of application to exempt repayment.
The Pressing Need to Revise the Life Rebuilding Assistant Act
A quick remedy for the disaster-affected people must be a cash benefit. The first step of support measurement, however, started with the provision of daily necessities, an evacuation center and temporary housing. The distribution of the Japan Red Cross Earthquake Aid was also greatly delayed. As the requests of the affected people rose, interest subsidy, rent subsidy and the Life Rebuilding Assistant Fund began, but the income and age qualification was too strict to aid the affected people equally, and the amount was too small to enable the people to be self-dependent.
It was only in May, 1998, three and half years after the disaster, that the Life Rebuilding Assistant Act for the Affected People was established. It started, however, with quite a few problems and a proviso was attached to reexamine the Act itself in five years (2003).
The points of the reexamination must be as follows: (1) to modify the qualification criteria (to abolish the income or age qualification), (2) to increase the amount of allowance (3.5 million yen at present), (3) to increase the number of affected households to receive the aid. Moreover, the Act should be applied to the affected area of the Great Hanshin Earthquake retroactively. The blow caused by the great earthquake has not yet been overcome.