Results and discussion of "Survey on SME preparations for natural disasters and support by regional financial institutions"

Author Name YAMORI Nobuyoshi (Faculty Fellow, RIETI) / OGAWA Hikaru (University of Tokyo) / YANAGIHARA Mitsuyoshi (Nagoya University) / HARIMAYA Kozo (Ritsumeikan University) / TSUBUKU Masafumi (Daito Bunka University) / OZAKI Yasufumi (Kushiro Public University) / AIZAWA Tomoko (Nihon University) / UMINO Shingo (Kagawa University) / ASAI Yoshihiro (Meiji University) / HASHIMOTO Norihiro (Kobe University)
Creation Date/NO. January 2020 20-J-002
Research Project The Role of Regional Financial Institutions as the Core of the Local Economy and Regional Cooperation
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Preparing for frequent natural disasters is necessary to increase the sustainability of small and medium-sized enterprises. The SME Strengthening Act, established in 2019, aims to promote BCP (Business Continuity Plan) formulation for small and medium-sized enterprises. As stipulated in the Act, regional financial institutions are expected to play an essential role in promoting cooperation among various organizations and institutions that support SMEs. On the other hand, regional financial institutions are making efforts to strengthen their ability to assess the business feasibility of SMEs, and they can provide BCP development support based on their close relationship with customers.

However, sufficient research has not been conducted on the status of efforts to support BCP formulation by regional financial institutions. Therefore, in May 2019, our research team conducted a questionnaire survey of 7,000 branch managers of regional financial institutions and received responses from 2,623 individuals. The purpose of this paper is to introduce the primary findings.

The main results were as follows. (1) Few financial institutions have a firm grasp of the status of BCP formulation at their client SMEs. (2) Few financial institutions have encouraged client SMEs to formulate BCPs. (3) Financial institutions are not aware of the credit guarantee program related to BCP and reconstruction support funds. (4) Financial institutions also poorly understand local governments' BCP support measures. On the other hand, (5) Efforts for the business feasibility assessments, in general, have progressed, and staff capabilities have improved. (6) Significant reforms have been made in the personnel evaluation system for that purpose. (7) There has also been some progress in collaboration with external institutions such as credit guarantee corporations, the Japan Finance Corporation, and tax accountants. The challenge now is how to incorporate the perspective of the need for business resilience against natural disasters, through efforts such as BCP formulation, into the above initiatives based on business feasibility assessments.