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.