FOCUS: Japan’s Community-Based Startup Aid Draws Growing Interest

Tokyo, March 27 (Jiji Press)–A financial support program operated by Japan’s internal affairs ministry, known as the “Local 10,000 Project,” is drawing increasing interest from startups and new business initiatives working to address local community challenges. Designed to foster new regional economic cycles, the project provides grants to local governments that collaborate with regional financial institutions to strengthen private-sector investment. The number of approved projects has risen sharply over the past two years. The continuation rate for supported projects is high, and the program has received positive reviews from communities for providing tangible benefits. Public Relations Overhaul The financial aid program supports business operators with initial investment costs, such as funding for facility development and equipment purchases. It combines national and local public funds with unsecured loans from regional financial institutions that exceed the amount of public aid, creating a support framework that closely follows individual projects from their early stages. In March 2024, the ministry revamped its website to strengthen outreach to potential applicants. Online content was revised to improve search engine visibility and videos were added to provide a program overview and showcase examples of how the aid has been used. Following these efforts, the number of projects approved for aid rose from 23 in fiscal 2023 to 82 in fiscal 2024. Due to the surge in demand and an anticipated budget overrun, applications were temporarily suspended from September to December 2024. In fiscal 2025, which ends in March, the number of approved projects is expected to reach about 140. As of January this year, projects in 390 local governments nationwide, including municipalities and prefectures, had received approval. These projects have involved cooperation not only from major regional banks, but also from second-tier regional banks and shinkin banks, or credit unions, with smaller lending volumes. Economic Benefits The ministry’s Local 10,000 Project has supported initiatives across a wide range of fields. In Matsue, Shimane Prefecture, western Japan, the program has helped revitalize a port town at the eastern tip of a peninsula. The area is known for its traditional townscape, including shrines and stone-paved streets, but turning this heritage into a stronger draw for tourists had long been a challenge. Using the program, local inn operators renovated three traditional townhouses into accommodation facilities designed to welcome both overseas visitors and group travelers. They also opened a bar at an existing lodging facility to serve as a social hub where guests can meet and interact with locals. “Economic benefits are emerging,” a city official said, noting an uptick in regional consumption and job creation. Believing that the program is helping to generate new economic cycles that benefit the community, the official suggested that the city government intends to continue providing hands-on support. In Ofunato, Iwate Prefecture, northeastern Japan, the ministry’s funding has backed a project to turn locally landed scallops and oysters unsuitable for raw consumption, as well as previously discarded “wakame” seaweed, into processed food products with high added value. Similarly, in Saku, Nagano Prefecture, central Japan, a sake brewery has been renovated into an experiential lodging facility, helping promote tourism in the area. Continuing Business In general, about 80 pct of companies remain in operation five years after their founding. By contrast, the five-year business continuation rate for projects that have received support from the ministry’s aid program stood at 97 pct as of the end of July 2024. Explaining the encouraging figures, an official at the internal affairs ministry said that businesses, local governments and financial institutions “share a strong desire to work together to make these projects successful.” In the draft initial budget for fiscal 2026, the ministry allocated 670 million yen for related expenses. From fiscal 2026, in response to rising prices, it will enhance the program through measures such as raising the ceiling on public funding from 50 million yen to 55 million yen per project. END [Copyright The Jiji Press, Ltd.]