Insurance program for Asia

Insurance program for Asia

TOKYO (AFP): The Japanese government will start a new trade
insurance program this month to boost trade with other Asian
countries, a report said Friday.

The international trade and industry ministry will encourage
Japanese banks to extend loans to other Asian banks which offer
credit guarantees for purchases of Japanese-made products, the
Nihon Keizai Shimbun said.

The system is being set up where banks, particularly in
countries such as Thailand and Indonesia which were hard hit by
the Asian currency crisis, have grown cautious about guaranteeing
repayments of local importers, the business daily said.

The insurance program will first apply to Sumitomo Bank Ltd.'s
US$100-million loan to the Korea Development Bank in South Korea,
it said.

Japan's trade insurance program has accumulated more than one
trillion yen ($9.2 billion) in deficit, it said.