The Development and Structure of Consumer Credit in Japan

This Note describes and analyzes the development, structure, and regulation of consumer credit in Japan, and identifies significant laws, regulations, or ministerial guidance that may restrict consumer credit markets and constrain the behavior of Japanese households. It also assesses the links between household credit and saving. The authors conclude that the development of Japanese consumer credit is one of the results of the transformation of the Japanese economy, which became evident in the mid-1970s. The past decade has set the stage for a structural reconfiguration of credit markets in which the banking sector is the key player. Both the growth of the market and its broad structural development are occurring independently of government policy, although government regulation has influenced the detailed shape of the credit market. The growth and development of Japanese consumer credit marks another step in the maturation of the Japanese economy.