alcohol business – NSMS 10 Wed, 18 May 2022 06:16:11 +0000 en-US hourly 1 alcohol business – NSMS 10 32 32 Some Japanese Cannot Live Without Payday Loans Wed, 18 May 2022 06:16:03 +0000 Some Japanese Cannot Live Without Payday LoansIt’s been a difficult ten years for the 48-year-old Takehiro Ji-hai after being fired from his position as Japanese food and beverage firm employee. There were no savings, and he was forced to find part-time jobs that paid per day or even by the week. A decade later, Ji-hai continues to jog from job to […]]]> Some Japanese Cannot Live Without Payday Loans

It’s been a difficult ten years for the 48-year-old Takehiro Ji-hai after being fired from his position as Japanese food and beverage firm employee. There were no savings, and he was forced to find part-time jobs that paid per day or even by the week. A decade later, Ji-hai continues to jog from job to job, moving furniture at one point and setting up a stage for a concert on the next available via I pass.

“I’m even finding it difficult to pay for transportation, so I choose jobs that allow me to get paid on a daily basis or in advance,” said the worker.

Ji-hai’s fellow workers are turning to businesses that provide payday loans — a way for employees to be paid for the days they’ve delivered, but not before payday. One reason that Ji-hai hasn’t decided to join any organization as a full-time employee is that he doesn’t have the time of waiting 30 days to receive the next payday.

Based on the Ministry of Health, Labor, and Welfare, 27 per of Japanese employees who provide for their families are employed temporarily. In only five years, the number has increased to one million and reached nine million in 2014. One out of seven families has no savings.

At the beginning of September, a Financial Services Agency official was shocked to discover the numerous businesses in Japan that can help companies set up payday loan programs.

“I never imagined there to be so many,” the official stated, looking at the list of about 20 companies. Several fintech, also known as companies that deal in financial technology, are on the list.

It is a custom to receive a payment once per month in Japan. Most employees receive their pay on the 25th day of each month for the work they have done in during the previous month. Thus, someone who starts new employment on the first day of the month may have to wait for 56 days before being paid.

Another trend seen in corporate Japan is recruiting employees through temp agencies and paying the workers less than regular workers. The majority of these workers are their wages on the 16th day of each month for the previous month’s work.

The new features allow employees to use their mobile devices to request advances. When payday rolls around, employees who have received advances will be paid the remaining salaries. A well-known service is accessible to over 1 million people.

Consumer credit on the decline

“The number of temporary workers who cannot survive without receiving cash every day has increased,” said one officer from one non-profit organization.

Boank is a company based in Tokyo. It provides a service that allows companies to increase the amount of their salary. Recently, it conducted a study of its corporate customers to determine the extent to which employees are taking advantage of their advancements. The results reveal that 48.6 percent of people who take advantage of the service do it to cover their living costs. In addition, 80% of those who use advances are between the ages of 20 and 30-somethings the bank’s president declared.

Stricter regulations for consumer finance are accelerating the growth of payday loan companies.

Consumer loans increased across Japan in the last decade due to their easy screening and the ease of getting cash. But the high-interest rates turned into a social problem, and the government started regulating money lenders with an interest cap on loans.

Interest rates

The payday service is very popular with employers as well. With a rising shortage of workers, firms are searching for ways to lure employees. More companies are opting to pay salaries every day in an attempt to attract employees. In June and September, the ratio between job offers to job seekers was 1.52. It’s becoming more difficult to locate and retain talent than during the height of the booming economy of the latter part of the 1980s.

One owner of a chain of karaoke establishments started paying workers on a daily basis and has had the number of applicants nearly double.

“Entrepreneurs have become aware of this trend and are piling into the market to help companies pay their workers more often,” he stated.

Some experts believe that payday advance companies that use fintech are illegal in the area.

The business models of the services are divided into two kinds. One is where client businesses put aside a certain amount of money they can draw from when employees request advances. The system provider is paid commissions that vary according to factors like how frequently the service is utilized.

In the second type of business, the provider pays the employee’s salary and then receives the exact amount from the client’s business. This is the type of business model in question — employees who use it are charged a fee that varies between three and six percent of their advancements.

This is equivalent to usury, a critique said. An employee may use an ATM to transfer money into their bank account through an equivalent payday lender 10 days prior to payday and is charged a 6%. 

Unlawful Practices

Many of these payday loan services are not formally registered as money lenders, saying they pay for wages in advance and, in doing so, give a social benefit to their clients’ companies.

However, one lawyer who works on clients with several debts claimed the majority of these firms “appear to be loan sharks circumventing the law.”

They could also breach the law on labor standards that obliges employers to pay their employees’ wages at one-time and in one lump sum to stop the exploitation of intermediaries.

A representative from the Ministry of Health, Labor and Welfare stated that giving employees wages could be “illegal in principle” and warned that businesses introducing salary advance systems may be subject to sanctions.

An FSA official told the media that it would take individual determinations on whether these services lend money. 

“There are various system providers,” the FSA official explained. “It is impossible to determine that they are all legal or illegal. But it is necessary to figure out what is going on.”

Financing service providers who take advantage of loopholes in laws and regulations will continue to rise. With the number of low-wage workers in need of advancement, the rules must be clarified.