Small business owners have struggled to get access to the financial resources they need to recover from the March 11 tsunami that devastated Japan's northeastern coastline. They need support to purchase equipment, restock inventories and rehire employees — needs that are often overlooked in a bid to restore the country's major industries and infrastructure.
Mercy Corps has partnered with two local groups to establish the Sanriku Tomodachi Fund for Economic Recovery, using $2 million in private donations earmarked for Japan's recovery.
The program will provide grants and subsidies to small- and medium-size businesses with less than 20 employees before the Tsunami. The three-pronged approach will provide one-year long employment subsidy for a minimum of 50 jobs, encourage up to 25 local start-ups, and provide free-interest subsidies to promote post-tsunami reconstruction.
PlaNet Finance Japan, an affiliate of the well-known French microfinance NGO, and the Japanese cooperative bank Kesennuma Shinkin will manage the fund and specifically offer:
- Resources to help micro, small and medium enterprises (MSMEs) rehire employees that they had to lay off due to the disaster and subsequent declines in business.
- Start-up funding to 20 to 25 new enterprises that offer services for emerging demands such as eldercare and childcare, value chain reconstruction or delivery services for temporary housing units.
- Interest subsidies for a new loan product that allows MSMEs that take out loans to recover the buildings lost to the tsunami. The loans will be interest-free for two years. The total portfolio size will be about JPY 800 million (approximately USD $10 million) and will provide financial assistance to more than 80 enterprises.
The new fund begins accepting applications from businesses this month.