Slow growth is expected in both the outstanding balance and gross lending in consumer lending in 2022, with increases for both consumer credit and mortgages. Following the prolonged impact of COVID-19 and the resultant financial struggles some people are facing in Japan, various relief measures and support systems have been implemented which make it easier for people to obtain loans.
The drive to increase financial literacy is gaining momentum in Japan. In general, the country has a history of its citizens being hesitant to be proactive in terms of investing, with many choosing a conservative approach towards saving money in general, which is considered prudent and even a virtue.
The Japanese government has extended tax deductions for mortgage loans for homeowners for 2022 and beyond, in order to spur economic recovery and help middle-income earners buy their own homes. There are also various other initiatives that have been implemented – for instance, the tax exemption period for newly built or resale houses has been extended from 10 years to 13 years.
Green fintech is becoming a hot topic, as the Japanese government is promoting SDGs (Sustainable Development Goals), and it has set the goal of becoming a carbon-neutral society by 2050. Therefore, various banks are now introducing sustainability loans for companies that are working on (or want to start working on) sustainability.
With increasing education on and awareness of consumer lending amongst consumers in Japan, it is expected that the number of services available will increase and diversify in the forecast period, so that consumers can find a product that works for their needs or beliefs. Differentiation is likely to be in terms of type of lending, loyalty scheme, lower screening requirement, or purpose-driven (sustainability).
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Aggregate of Consumer Credit and Mortgages/Housing. Gross Lending: The total value of loans advanced by institutions in a given year; data refers to single year only. Outstanding Balance: The collective amount owed by borrowers at the end of a given year; data refers to the cumulative impact of debt.See All of Our Definitions
This report originates from Passport, our Consumer Lending research and analysis database.
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