Introduction of Microfinance into Japan

Introduction of Microfinance into Japan
RIKU Shiraishi

Today, a significant number of the world’s population are living on less than US$2 a day. Their dignities that all people should have are trampled down and even the opportunities of receiving education and medical care are deprived. Microfinance invented in the mid-1970s had rescued people from the cycle of poverty around the world. That is an extension of small loans to the very poor, in combination with other financial services, such as savings facilities, training, health services, networking, and peer support. Using invented brilliant tool and system, people who those cannot have food for tomorrow can get an opportunity to get happier lives. Nowadays even in Japan, there are many people living in the cycle of poverty. The considerable percentage of children under 18 years old lives in households on the low-income level which unavailable to buy food for tomorrow. Introduction of microfinance into Japan can greatly benefit low-income people because it could function as secondary safety-net, has possibilities to economically break the cycle of poverty, and provides opportunities have mind independents while maintaining autonomy.

The first reason why microfinance can provide low-income people benefit is it can be function efficiently as secondary safety-net. There is a high possibility that the public safety-net will collapse. The main reason why collapsing the public safety-net is that the number of labour-appropriate people will decrease significantly in proportion to those who need public support. Research by the Ministry of Internal Affairs and Communications of Japan (2016) stated that predicted that the population aging rate will be 31.8% in 2030. Along with that, the Cabinet Office of Japan (2017) mentioned, in 2025, 148 trillion yen, which is over 25% of the national budget, will be spent on social security benefits. In view of the government, in order to build a sustainable social security system, it is necessary to ensure fairness among generations, and a balance between benefits and burdens (Prime Minister of Japan and His Cabinet, 2008). Under such circumstances, it is also extremely important to seek solutions on a private basis not only public, so microfinance will also become one important key. In the first place, social security is a system of mutual-solidarity and living-security when difficulty self-reliance by their own efforts because of illness, injury, old age etc. Also, as a source of social security fees, the Japanese citizen pay our government. "Medium-term program" for sustainable social security construction and its stable financial resources stated, in order to build a sustainable social security system, it is essential to reduce the population that needs social security, and a stable fiscal foundation (Prime Minister of Japan and His Cabinet, 2008). In response to that, microfinance can be functional to break the cycle of poverty, and to increase in the amount of tax payment due to the increase in the income of low-income people (Masahiro, Kan 2014).

A second reason that the introduction of microfinance into Japan can greatly benefit the low-income people because it has the possibility to economically break the cycle of poverty. In low-income families who have received microfinance loans, become possible to consider not only short-term consumptions but also long-term educational investments as important. According to Ministry of Health, Labour and Welfare (2016), 56.1% of them are concerned about children's education, to unable to get the opportunity of neat education. According to Asahi Shimbun (2016), Michiko Enoki, the Representative Director from a single mother support association, who is also a single mother, described how children from single-parent families are bullied for not being able to pay school-lunch fee or having dirty clothes, and can be reasons for quitting school. In general, it is possible to get a position with high wages by receiving basic education. Ministry of Health, Labour and Welfare (2016) stated, the percentage of who theses wanted to continue working is 66.6% of all mothers of single mother households. And 44.4% of them wanted to change their jobs are in position of employment as temporary employee. Low income is the primary reason for wanted to change their jobs. According to the Prime minister of Japan and His Cabinet (2008), the organization of public aid have three phases as life support, work preparation, and employment introduction. As one major measure, the government is seeking acquisition of qualifications and skills so that they can change jobs to high-income occupations. Also, Ministry of Health, Labour and Welfare (2016) pointed out that even if they are understanding the importance of acquiring skills and qualifications, there is even a disparity between whether they can reach information on how to do it. In the microfinance structure, they have asked that loans with low-interest rates are used to gain employment opportunities, so their individual market value improvement is brought, and stable wages are secured (Reed, 2011). According to Kan (2016), in the weekly meeting, applicants for microfinance has trained to acquire skills and the microfinance institute going to do employment introduction.

The third reason why the introduction of microfinance into Japan can greatly benefit low-income people is it provides opportunities to have mind independents while maintaining autonomy. Loan recipients will be able to relief from stresses and mental pressure. According to Kan (2016), It is likely to break the cycle of poverty by fully using their opportunities and potential self-development are brought by relieving from stresses and pressure, positive decisions for long-term self-actualization. Also, Reed (2011) stated, microfinance is designed to institutionally giving feel free from such as stresses and pressure. it is necessary for the neighbourhood five people to form a group and to receive loans as a group, seeking meetings more than once a week, so this system has achieved to relief stress and pressure by connecting with their surroundings and sharing them their worry and anguish.
In addition, their maintaining autonomy likely to have provided by the private sectors, not the public sectors. Mind independence means that they do not feel they have been helped their lives by someone, but they make their own lives. Microfinance is still a loan and needs repayment to the last. This will pursue a sense of self-responsibility while maintaining their subjectivity and building a safety net system based on such self-responsibility is difficult to realize in the public field, but microfinance will also play a role of a sustainable safety net and to break the cycle of poverty. (Larry R. Reed, 2011).

There are many reasons why introduction of microfinance into Japan is good for the low-income people. It can function as a second social security. In the Japanese society in which the population-ageing society develops, the current social security system is in serious crisis. Furthermore, not only public social security but also social security from the private sector is required, and Microfinance is highly expected. At the same time, along with the increase in incomes of low-income people, it will be of great help to establish the public foundation of public social security. If they receive loans, they can break the cycle of poverty. Households incomes spent on long-term investments such as education and training for their job-hunting. Furthermore, they have trained to acquire skills and the microfinance institute going to do employment introduction and they will be able to break the cycle of poverty. And it provides them with mind independence. Unlike public support, self-esteem will be maintained by the payment of interest rates where self-responsibility arises. Respect for self-esteem is a source of energy for their lives, and as a result, it is institutionally possible to create a big step that is mental independent. Microfinance not only rescues low-income people from the bottom, but also respects them and encourages social independence. Therefore, microfinance gives great benefit to them.

Reference
Amartya Sen (2006). 人間の安全保障(Human-Security). Shueisha Inc. Japan Tokyo.

Asahi Shimbun (2016). 子どもと貧困 (Children and Poverty). Asahi Books. Japan Tokyo.

Cabinet Office of Japan (2017). 社会保障給付費の推移 (Trends in Social Security Benefit Expenses). Cabinet Office of Japan. Retrieved on November 16, 2018 from: http://www5.cao.go.jp/keizai-shimon/kaigi/special/2030tf/281020/shiryou1_2.pdf

Kan, Masahiro (2014). 貧困克服への挑戦 構想 グラミン日本 (グラミン・アメリカの実践から学ぶ先進国型マイクロファイナンス) ("Challenge to Overcome Poverty" Concept Grameen Japan (Advanced Country Microfinance to Learn from Grameen · American Practice)). Akashi Shoten. Tokyo.

Larry R. Reed (2011) State of the Microcredit Summit Campaign Report 2011. Microcredit Summit Campaign, A project of RESULTS Educational Fund. United State

Ministry of Health, Labour and Welfare (2012). 社会保障全般 (Social security). Ministry of Health, Labour and Welfare. Retrieved on November 16, 2018 from: https://www.mhlw.go.jp/stf/seisakunitsuite/bunya/hokabunya/shakaihoshou/index.html

Ministry of Health, Lobar and Welfare (2016). 平成28年度全国ひとり親世帯等調査 (Survey of nationwide single-parent families, 2016). Ministry of Health, Labour and Welfare. Retrieved on November 16, 2018 from: https://www.mhlw.go.jp/stf/seisakunitsuite/bunya/0000188147.html

Ministry of Internal Affairs and Communications (2016). 我が国における総人口の長期的推移(Long-term trend of the total population in Japan). Ministry of Internal Affairs and Communications. Retrieved on November 16, 2018 from: http://www.soumu.go.jp/main_content/000273900.pdf

Prime Minister of Japan and His Cabinet (2008). 持続可能な社会保障構築とその安定財源確保に向けた「中期プログラム」 (Medium-term program" for sustainable social security construction and its stable financial resources). Prime Minister of Japan and His Cabinet. Retrieved on November 16, 2018 from: https://www.kantei.go.jp/jp/kakugikettei/2008/1224tyuuki.pdf