diversification of minds - conversation in processes
design for communities

Tokyo, 07.10 - 09.10 1999

10 09 pm<Mapping Relations>
Masaru Kataoka, Citizen's Bank, Tokyo, Japan

Mapping of exchange within communities, the Citizen's Bank in Japan

The Citizen's Bank started its service in 1989 under co-operation between Press Alternative (PA) and Eitai Credit Union in downtown of Tokyo. After that, thanks to the similar co-operation with Shokusan Bank in Yamagata Prefecture in 1994 and with a commercial bank through Oosaka-Fu in 1995, the Citizen's Bank spread its service to other areas.
Now in Japan, following after collapse of the bubble economy, managerial crisis of financial institutions is aggrevating and, in 1995, three credit unions in Tokyo have gone bankrupt one after another. Credit unions, too, are now at a turning point. During the bubble economy period, credit unions followed after major banks and actively participated in lending money to real estate transactions in pursuit of profit and business expansion, but, as the bubble economy has collapsed, they are required to acquire something plus and unique in their characters as a credit union.

There are several characteristics which differ the Citizen's Bank from conventional loan services. The primary objective of the Citizen's Bank is to nourish socially meaningful businesses. What is considered most is social value of business.

Secondly, as an epochal scheme, the Citizen's Bank does not require any mortgage security for loan. Thus far in Japan, it has been very difficult for commencing of business of social significance, or for business start-up by woman, to obtain loan, and it has been so, needless to say, in case they had no securities and even in case they did. To solve such a situation, it was the Citizen's Bank that enabled women to have a financial access. On the other hand, however significant such a business might be, financial assistance by the Citizen's Bank is not a donation but a loan and, therefore, subject to repayment.

Thirdly, the Citizen's Bank makes intensive check on profitability of business. We request submission of business plan and check to see if the business is likely to be profitable. But, unlike the ordinary approach of negative rating or assessment, if the applicant does not know how to prepare business plan, then we take care of her up until she can prepare such documents for herself.

That means to train and educate entrepreneurs, the fourth characteristic. Applicant-lendees of loans from the Citizen's Bank are required to attend to "WWB/Japan Business School" as offerred by our sister company WWB/Japan so that they can acquire knowledge about accounting and managerial know-how required. Not only providing a support for bussiness start-up, but once a business is launched, we are committed to provide follow-up services for sustaining the business.

The fifth characteristic is follow-up services after implementation of loan. For example, we volunteer to assist a lendee-client at the store opening. Assistance is also given in respect of efficient advertisement that we introduce entrepreneurs on our monthly information magazine "Citizen's Bank & WWB/Japan News" or that we introduce them to mass media. Thus, by giving continued attention and care to our loan-clients and by maintaining face-to-face relationship, we can establish mutual trust and confidence.

In principle, business of socially high importance such as welfare is difficult to make profit and should be undertaken by public services. However, public sectors alone can not fully provide warm-hearted services. Up to the present, such a vacancy was filled by the hands of volunteers. But, however seriously citizens of voluntary spirit may undertake such supplementary services, voluntary activity has a limit and can not warrant its continuity. There appeared new businesses under which truly needed services are being purchased by those who need them and the providers are charging fair prices not for earning big profits but for keeping minumum proceeds to carry on their businesses. By taking in advance of such changing society, we would like to change the consciousness of financial institutions as lenders and, further, to review the roles of such institutions.
To add, by taking the Citizen's Bank which has now become an inspirator of wind of new era as a leading model, we would like to expand it to various places.

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