() is one of the largest

Japan Japan is an island country in East Asia. Located in the Pacific Ocean off the northeast coast of the Asia, Asian mainland, it is bordered on the west by the Sea of Japan and extends from the Sea of Okhotsk in the north to the East China Sea ...

ese

consumer finance Personal finance is the financial management that an individual or a family unit performs to budget, save, and spend monetary resources in a controlled manner, taking into account various financial risks and future life events. When planning ...

companies. The company is based in

Kyoto Kyoto ( or ; Japanese language, Japanese: , ''Kyōto'' ), officially , is the capital city of Kyoto Prefecture in the Kansai region of Japan's largest and most populous island of Honshu. , the city had a population of 1.46 million, making it t ...

and has annual profits of close to ¥100 billion on over ¥2 trillion worth of loans (2005). The company had to restructure its debt after failing to make a loan payment.

History

Aiful was established in April 1967 by Yoshitaka Fukuda as a sole-proprietorship. In 1978, this small company was reformed in

as Marutaka, Inc. and opened its first four branches to expand its consumer-finance business. The company continued to grow over the next five years and it acquired three small companies in the same business segment and renamed itself Aiful in 1983. These mergers gave the company over ¥90 million in capital and a growing market share in the consumer loan sector. Soon afterward, the company began to offer home-equity and small business loans. During the 1980s and up to the present day, the company has continued to expand by finding new investment opportunities, particularly real estate, engaging in mergers to increase its market share. Today the company offers a wide range of consumer financial services, ranging from issuing credit cards to providing home equity loans. Additionally, the company provides small business loans and until recently operated a chain of

karaoke is a type of interactive entertainment system usually offered in nightclubs and bars, where people sing along to pre-recorded accompaniment using a microphone. Its musical content is an instrumental rendition of a well-known popular song. I ...

parlors and Taiwanese-style restaurants. The company has 912 branches (many of them

automated teller machine An automated teller machine (ATM) is an electronic telecommunications device that enables customers of financial institutions to perform financial transactions, such as cash withdrawals, deposits, funds transfers, balance inquiries or account ...

s) throughout Japan and currently employs over 2000 people.

Criticism

The company has many techniques to promote repayment that some have viewed as unscrupulous, but have resulted in a low default rate for the bank. Additionally, the company has been charged by some individuals with exploiting the financial problems of some consumers by offering high-rate loans that must be secured by collateral, often the individual's real estate. This may lead to loss of a consumer's home and has led to allegations that the company is a '' sarakin'' or a

loan shark A loan shark is a person who offers loans at Usury, extremely high or illegal interest rates, has strict terms of debt collection, collection, and generally operates criminal, outside the law, often using the threat of violence or other illegal, ...

. Several advocacy groups have been formed for those who feel victimized by such practices. In 2006 regulators in Japan ruled against the lending practices of the consumer finance sector{{Cite web , date=2019-04-02 , title=The Japanese Consumer Finance Market and its Institutional Changes since the 1980s , url=https://shs.hal.science/halshs-02088335v1/document#:~:text=In%202006%2C%20in%20order%20to,the%20overall%20consumer%20finance%20market , access-date=2024-06-06 , website=shs.hal.science and revised the maximum legal lending rate to 18.75% (down from a previous legal limit of 29%). Furthermore, this ruling enabled consumers to claim back the interest they have been overcharged from companies like Aiful for a period of up to 10 years back, which forces them to make high provisions for these reimbursements on their balancesheet. On April 14, 2006, the FSA issued a business suspension order that forced Aiful to shut down domestic operations for three business days and in some areas up to 25 days.

Advertising

In contrast with the more staid image of the more traditional banks, Aiful and other consumer finance companies attempt to have a livelier image. For example, the signs and logos of Aiful and its subsidiaries are often very colorful and eye-catching, seeking to draw passersby into loan outlets. Recent advertisement campaigns have featured Chihuahua TV ads and special loans marketed towards women. Additionally, Aiful and other consumer finance companies often distribute packages of tissues at mass transit stations.

References

External links

Aiful Corp.
(in Japanese)
Aiful Corp. IR info
(in English)

Financial services companies established in 1967 Financial services companies of Japan Companies based in Kyoto Companies listed on the Tokyo Stock Exchange