EXCLUSIVE: Japan Eyes Digital Emergency Welfare Loan Applications

Tokyo, May 4 (Jiji Press)–Japan is considering digitalizing applications for emergency special loans under its welfare fund program, in a bid to speedily support households struggling financially in emergencies such as natural disasters, Jiji Press has learned. The welfare ministry expects that the digitalization will begin partially in fiscal 2028 to allow households in financial distress to apply quickly via smartphones. The shift will be implemented in stages at social welfare councils, with nationwide expansion expected for fiscal 2029. Applicants for welfare funds typically need to submit a residence certificate and other documents for identity verification along with an application form stating household income. These are usually accepted in person. The ministry hopes to establish a system making it possible in emergencies to apply for special loans only by entering necessary information through devices including smartphones using their My Number card information for identity verification. When Japan provided welfare fund special loans between March 2020 and September 2022 in response to the COVID-19 pandemic, more than 3.8 million applications were received nationwide. For the special loans, applicants were required to send their documents by mail as a precaution against the spread of infection. But it took a long time to complete the examination of the applications because the number was huge and many documents were incomplete. This is widely viewed as a problem. The ministry is discussing solutions with experts and others and has started work to build a consensus on the idea of introducing an online application system at some social welfare councils in fiscal 2028, sources said. While in normal times, applications and consultations will be conducted in person as at present, the new system would help enhance convenience and efficiency during emergencies, the sources added. Another major problem with the welfare fund program is how to recover massive special loans extended during the pandemic, which totaled 1,443.1 billion yen. By the end of December 2025, 654 billion yen in claims had been given up for low-income households. But of the 303.8 billion yen that fell due at the end of that month, only about 44 pct were repaid, with nearly 60 pct in arrears. The ministry hopes to ensure strict application examination and improve consultation services. “Rebuilding the lives of households in arrears will also help improve the recovery rate,” a senior official said. “We hope to establish a system as soon as possible to provide appropriate support even in an emergency.” END [Copyright The Jiji Press, Ltd.]