TOKYO, (Sep. 22) IPS - Harumi Yagi was seeking a loan to augment the
capital she and several other women gathered to put up a shop, but they
found themselves shut out of Japan's traditional banks.
So they turned to the Women's Citizen's Bank (WCB), a credit union that
since its creation in August has responded to women whose plans for
business and greater self-reliance have been set back by recession and
traditional banking approaches here.
"It was impossible for us to borrow from the big banks because as
housewives we did not have a regular salary, nor did we have assets as
the family homes are usually in our husbands' names," Yagi explained.
Yagi and her friends will put up "We-Shop," which sells clothes and
other sundries. As a non-profit organization, it follows a system where
10 percent of profits will be sent to Asian countries to support
projects that help women become more financially independent.
"The organization is geared to help women who cannot borrow from
regular banks because of their low economic status, to get on their
feet by lending them money," explained Eiko Mukaida, 52, one of the
bank's two owners.
Mukaida, a former assembly member who resigned after eight years in
local administration, says she hopes WCB will become a full-fledged
lending bank soon after she overcomes massive bureaucratic red tape.
"There are many women customers out there who need the money and I am
sure of success," she insisted. Japan has a few other financial
institutions that help women entrepreneurs, but WCB is the first that
is solely for women.
But putting up the Women's Citizen's Bank has not been easy, especially
in a male-dominated society that treats women not as equal partners but
rather supporters of the mainstream system.
Yasuko Ito of Nest, a day care center, knows exactly what that means.
Before she got approval from WCB, she had sought a loan of some $26,000
from a big bank that asked her to come back -- with her husband.
"Banks think it's risky to lend to women who have no record of being
successful in business," explained Kiyoshi Ota, a director in the
social policy research division of the Economic Planning Agency.
But the women's bank venture is not just about an organization run by
women, for women.
In many ways, it also thumbs its nose at Japan's prevailing banking and
corporate culture, one that is built on close-knit cooperation between
big companies, bureaucrats and politicians.
This is part of the greed and corruption that many Japanese see as the
core reasons behind why banks have lost credibility and are in deep
trouble that threatens the economy today.
Now, the government is scrambling to stave off a collapse of the
banking system, through a plan to use public funds of some $97 billion
to ensure that none of 19 major banks fold up under the weight of bad
and uncollected debt.
Mukaida says WCB, based in Kanagawa prefecture outside Tokyo, offers an
alternative to this tired, old system. After all, she recalls, she was
sick of hearing stories of how during the bubble economy, public bank
money was spent to entertain finance ministry officials in seedy bars
in exchange for special treatment.
Uncontrolled investment in real estate by many banks jacked up property
prices so much that ordinary people were left out.
In an effort to avoid this way of doing business, WCB will lend only to
women who run businesses that work toward cleaning the environment or
offering social help to the public.
Operating as a credit union, WCB hopes to follow a lending pattern
similar to that of the Bangladesh-based Grameen Bank.
Already, WCB has received a flood of investors as well as credit
applicants. Since its inception, it has had 400 women investors and
collected nearly $350,000.
Out of several applicants, it has selected three women-run
entrepreneurial projects, including Ito's day care center and Yagi's
shop, as the first borrowers.
At 1.8 percent, its interest rates are the lowest among Japanese
financial institutions. A strict screening process limits the number of
prospective borrowers, who need to have at least 10 co-signers for each
All loans must be paid in five years, and a loan limit is set at
$740,000. "We want to avoid bad loans," explained Mukaida.
Some analysts worry that the low interest rates will not allow the WCB
to cover bad loan losses and sustain the institution in the long run.
But Mukaida, who will not receive a salary for the first few years,
says she will try to manage by channeling surplus funds into covering
possible bad loans.
In the process, Mukaida said: "The WCB will definitely work to help
Japanese women become independent and will also play a crucial role in
making Japanese society more equal."
Beyond that, she adds the WCB would also be a small step in reforming a
banking system that has been led by men who put profit before developing
the quality of life of the public.
"Economic development for men means a lot of expensive high-rise
buildings, roads, a never-ending supply of fashionable good that are
really no use to the average person," Mukaida explained. "We need money
to be spent on better health care for the elderly, education, nursing
homes and day care."