({{tyo, 8515) is one of the largest

Japan Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...

ese

consumer finance Personal finance is the financial management which an individual or a family unit performs to budget, save, and spend monetary resources over time, taking into account various financial risks and future life events. When planning personal fi ...

companies. The company is based in

Kyoto Kyoto (; Japanese: , ''Kyōto'' ), officially , is the capital city of Kyoto Prefecture in Japan. Located in the Kansai region on the island of Honshu, Kyoto forms a part of the Keihanshin metropolitan area along with Osaka and Kobe. , the ci ...

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 founded Aiful when he was a teenager; now Japan's fifth-largest consumer finance company. Residing in Tokyo, he is married with three children. See also *List of billionaires ''The World's Billionaires'' is an annual ranking by documented n ...

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 Karaoke (; ; , clipped compound of Japanese ''kara'' "empty" and ''ōkesutora'' "orchestra") is a type of interactive entertainment usually offered in clubs and bars, where people sing along to recorded music using a microphone. The music is ...

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

automated teller machine An automated teller machine (ATM) or cash machine (in British English) is an electronic telecommunications device that enables customers of financial institutions to perform financial transactions, such as cash withdrawals, deposits, fun ...

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 is a Japanese term for a legal moneylender who makes unsecured loans at high interest. It is a contraction of the Japanese words for and . An illegal loan shark who goes above legally permitted maximum interest rates is called ''yamikin'', short ...

'' or a

loan shark A loan shark is a person who offers loans at extremely high interest rates, has strict terms of collection upon failure, and generally operates outside the law. Description Because loan sharks operate mostly illegally, they cannot reasonably ...

. 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 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.

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