Significant Decrease in Asian Syndicated Loans Outside Japan

One of the main reasons behind the coming of global economic recession was that banks gave too much money and they could not recover them and it triggered the crisis. So, now many banks are reluctant to take risks but big companies need big loans and often they have to go for syndicated loans. If you did not know about the definition of a syndicated loan then I would like to tell you that it is a kind of loan that is big in amount and several banks and financial organizations together come and join and from a syndicate and give the loan. Now because of the economic crisis, getting syndicated loans is becoming very difficult in rest of Asia except Japan. But as a result, there has been sharp decline in this field.

Bloomberg reported:

Asian syndicated loans outside Japan slumped 64 percent in the first quarter to the least since 2004 as banks tightened lending.

Loans totaled $19.9 billion in the first three months, compared with $54.6 billion a year earlier, according to the data compiled by Bloomberg. There were 82 transactions, down from 209 a year earlier.

This is bad news for a Asian overall economy because at this moment, the big companies need loans and they are becoming helpless because there is a global crisis and their workers are worried about the future job prospects.

Japan Keen on Giving Financial Assistance to Asian Countries

Many people in the developing and poor countries are afraid these days because they feel that the rich countries are too much busy with their own problems and will not have enough money and mind to help the poor countries. The poor countries are suffering a lot from the economic recession and the countries who are dependent on foreign aid and exporting to rich countries are extremely worried about the coming years. Japan is one of the leading donors of Asia and many Asian poor countries and developing countries get a lot of financial aid from Japan. The good thing is that Japanese government is now keen to continue the support.

Reuters reported:

Japanese Prime Minister Taro Aso will pledge fresh support for trade financing and offer up to $20 billion in aid for Asia at a G20 summit on the global economic crisis, an official said on Wednesday.

In a meeting with Indonesian President Susilo Bambang Yudhoyono ahead of the summit, Aso said he would offer a fresh $22 billion in support for trade with developing countries.

Do not jump to the conclusion that Japan is a generous country and it is going to help the other Asian countries without any benefit. Do not forget that Japanese a country dependent on exports and if other Asian countries become too much poorer then Japan will find itself into a difficult position to export.