Tokyo (AsiaNews) – An increasing number of Japanese are turning to multiple lenders to cover their daily expenses.
By the end of the 2025 fiscal year (which ended in March), 1.55 million people held at least three unsecured loans with as many creditors, the highest level in 12 years out of a population of some 120 million.
The primary driver of this indebtedness is the rising cost of living, as wages struggle to keep up with prices.
According to data from the Japan Credit Information Reference Center, which tracks individual debt and credit information, the rise is particularly pronounced among those holding five or more loan contracts.
At the end of the 2025 fiscal year, this group numbered 150,000 people, up from 90,000 five years earlier.
As of July of this year, the average outstanding debt for each borrower in this group stood at 1,447,000 yen (US$ 9,135), up by nearly 100,000 yen compared to three years prior.
“Wage growth has not kept pace with prices, and people without savings are borrowing to cover the shortfall,” said Yuki Fukumoto, head of financial research at NLI Research Institute, speaking to Japan Times.
A survey commissioned by Japan’s Financial Services Agency and published in July confirms the impact of economic hardship: 53.7 per cent of consumer finance customers stated they had taken out a loan to cover living expenses.
This situation is not entirely new for Japan, where reforms were introduced in the early 2000s, specifically to combat over-indebtedness.
In the 1990s, excessive lending by financial companies led to a rise in bankruptcies. At the same time, aggressive debt collection practices had become a social issue.
Consequently, an amendment to the money-lending business law was passed in December 2006, taking effect in June 2010, which capped borrowing at one third of the applicant's annual income.
Since then, the number of people with debts to multiple lenders had steadily declined, falling from approximately four million to 1.14 million by the end of the 2020 fiscal year. However, the trend has since reversed and is rising again.
The digital transformation of the sector is facilitating access to credit. Financial companies are increasingly moving away from physical branches to focus on online contracts.
For instance, Aiful closed all its staffed branches in July, while SMBC Consumer Finance, which offers loans under the Promise brand, did the same in September. Platforms such as Mercari and Line Credit also offer online personal loans that can be applied for directly via smartphone.
In the 2025–26 fiscal year, the Japan Credit Counselling Association received 5,646 calls from individuals seeking help with debt problems, a 14.4 per cent increase over the previous year.
In August of this year alone, the number of calls exceeded 600. In many instances, counsellors also receive requests for assistance from people in debt due to gambling or impulsive purchases within online video games.
The situation can worsen when individuals who can no longer secure loans from authorised institutions turn to illegal lenders.
