Japan’s consumer finance industry is on the verge of collapse thanks to the implementation of laws first passed in 2006, with one lender reported to be filing for bankruptcy and others expected to follow.
The laws, which have slashed the profitability of the industry, have already resulted in the default of one lender, Aiful. That case had implications for the global financial services industry as buyers of credit default swap (CDS) protection sought payment. The news that Aiful peer Takefuji is also in trouble has credit markets outside Japan watching with interest.
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Takefuji’s reported bankruptcy |
At the time of going to press Takefuji, a lender that does not, like its peers, enjoy support from a big bank, was reported in Japanese media to be filing for bankruptcy, with an estimated ¥430 billion ($5.1
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