Business and Management Plan

JFC has formulated the following Business and Management Plan for the period from FY2022 on.

Business and Management Plan（FY2022-2024）

The roles strongly required of JFC as a policy-based financial institution, of which there is renewed awareness as a result of its responses to the COVID-19 pandemic, are to continuously review operations to ensure that they are capable of addressing largescale crises with the premise that such crises may occur in the future and to demonstrate reliable safety net functions under all circumstances.

JFC collaborates with relevant organizations to support business creation and new businesses including the start-up and other companies that will lead the new society in the post-COVID era, promote exports of agricultural, forestry, fishery and food products, and provide strong support in growth strategy areas such as business succession, which is a management issue for many clients. By supporting SMEs, micro/small businesses, and agriculture, forestry, fisheries and food business operators, which function as the foundations of regional economies, JFC is contributing to regional revitalization.

JFC also promotes further digitalization so that it can provide such policy-based financial services broadly and promptly. In addition, JFC will contribute to the achievement of the Sustainable Development Goals (SDGs) in order to create a sustainable society by supporting these types of clients and contributing to communities.

In accordance with this approach, each employee, as a policy-based finance operator, will undertake the following with a sense of mission to demonstrate their roles to connect this policy to its various business endeavors.

First, when performing its safety net functions, JFC will support clients that were affected by the COVID-19 pandemic and steadily and agilely provide support for recovery from and restoration following other natural disaster including earthquakes and typhoons.

Next, JFC will focus its efforts on Strategic Fields of Growth, etc. including start-ups, new business, business revitalization, business succession, social business, overseas expansion, new development of agriculture, forestry, and fisheries business operators, environmental and energy measures, promotion of digital transformation (DX), and support for customers undertaking business restructuring with an eye toward the post-COVID era for the future development of the Japanese economy. Of these, we are responding to the increasing need for business succession by placing particular emphasis on enhancing information collection capabilities and collaborating with relevant organizations to provide effective consulting including matching. With regard to overseas development, we will bolster support for overseas expansion and export growth.

Furthermore, in order to contribute to regional revitalization, JFC carefully ascertains the circumstances surrounding regions and businesses, taking into consideration the changes in the business environment during the COVID-19 crisis in particular, and adopts a bird's eye perspective of regions to work together in order to solve their problems. In doing so, we will perform our function of connecting the various relevant organizations while using our nationwide network of 152 branches to utilize the unique characteristics of the JFC and promote further collaboration with local communities.

Also, given the significance of the policy finance function, we are working to perform an appropriate risk-taking function, and to provide high-quality services by focusing on demonstrating our consulting functions and our policy recommendation abilities, as well as consistently promoting publicity activities.

In carrying out our affairs, we will follow the principle of "doing ordinary tasks with excellence" while maintaining a high level of awareness of compliance and steadily and appropriately building on each individual task. In addition, taking a bottom-up approach to management as our motto, we aim to gain an accurate understanding of customer and regional needs, respond empathetically, and become a more familiar and reliable presence. To this end, we are working to reinforce our nationwide network of 152 branches. In particular, the integrated branch office manager will continue endeavoring to fulfill the role of the cornerstone of the network. Furthermore, in order to reinforce policy-based finance functions, taking into consideration responses to the COVID-19 crisis, we will address organizational operations by reinforcing organizational response capabilities by securing personnel and taking other measures during emergencies, promoting further digitalization, and undertaking measures to carry out proposals made from an on-site perspective to continuously streamline administration including abolishing unnecessary procedures and raise the efficiency of operations. When carrying out IT strategies, we will deeply analyze the trends of digitalization of private financial institutions, select the methods most suitable for JFC. We will also address human resource development and utilization and promote diversity by creating rewarding workplaces where employees can maximize their abilities through measures such as telework and staggered commuting times.

Business Operation Plans

1.Respond carefully to the needs for safety net services, provide a stable supply of funds, and collaborate with private financial institutions

(1) Support clients affected by the COVID-19 Crisis.

A. Respond in a supportive manner to loan, repayment and other inquiries from clients affected by the COVID-19 crisis.

(a) Effectively and prompt provide detailed responses by the COVID-19 Special Consultation Desk.
(b) Provide loans in a timely and appropriate manner through COVID-19 Special Loan Program, COVID-19 Hybrid Subordinated Loan Program, Special Loans for Agricultural, Forestry, and Fisheries Business Operators, and other programs.
(c) Respond attentively and swiftly to repayment inquiries.
(d) Respond in detail and at a timely manner through insurance for Safety-net Guarantees No. 4 and 5.

B. Appropriately implement Operations to Facilitate Crisis Responses to cope with any crises recognized as COVID-19 Related Matters.
C. Collect and disseminate case studies of business maintenance and development for overcoming the COVID-19 crisis and demonstrate consulting functions through follow-ups after the provision of loans.

(2) Support for reconstruction from the Great East Japan Earthquake.

A. Respond sincerely to earthquake-affected customers seeking advice on financing and repayments, etc.

(a) Respond smoothly, promptly, and carefully through special consultation desks for the Great East Japan Earthquake.
(b) Provide loans in an appropriate and timely manner through the Great East Japan Earthquake Recovery Special Loan and the Special Earthquake Loan for Agricultural, Forestry and Fishery Business Owners and for Food Business Operators.
(c) Respond attentively and swiftly to repayment inquiries and issues with overlapping debt.
(d) Endeavor to make prompt and precisely tailored responses through credit insurance such as the Great East Japan Earthquake Recovery Emergency Guarantee Program.

B. Make precisely tailored responses to reconstruction projects implemented in affected areas.

(3) Make precisely tailored responses to the needs of customers for safety net services.
Safety net financing such as funding support.

(a) Provide precisely tailored support to SMEs and micro/small businesses confronted with changes in the management environment as a result of natural disaster, pandemic, economic circumstances, or other factors and working towards business improvement.
(b) Provide safety net functions to agricultural, forestry, and fishery business owners who have suffered the effects of natural disasters, infectious livestock diseases, pandemic, falling prices of farm produce, or some other adversity, and those working towards business improvement.

(4) Provide funds to customers in a timely and efficient manner.

A. Support the funding needs, etc., of customers.
Swiftly handle the funding needs of customers such as various loans, funding programs, and securitization.
B. Promote online applications through follow-ups after financing for the effective provision of capital even during emergencies.
C. Respond quickly to emergencies and conduct operations in a prompt and smooth manner. Facilitate precise operations to facilitate crisis responses.

(5) Steadily implement the Credit Supplementation System.

A. Support for SMEs and micro/small businesses through the Credit Supplementation System.

(a) Respond appropriately to demands for safety net services related to credit guarantees.
(b) Respond appropriately to various systemic and operational revisions by collaborating with relevant institutions.

B. Strengthen collaboration with Credit Guarantee Corporations, etc.

(6) Enhancing initiatives for collaborative measures with private financial institutions.

A. Continue efforts to promote cooperative loans with private financial institutions, etc. such as in growth strategy areas and reinforce collaboration relating to responses to clients affected by the COVID-19 crisis.
B. Encourage organizational dialogue including on the officer level and spread collaborative situations to management.
C. Hold practical level meetings, refer customers from JFC to private financial institutions, and reinforce measures for effective news releases.
D. Create and promote cooperative loan products.

2.Supply funds with priority given to Strategic Fields of Growth, etc.

JFC supports active responses to new development of start-ups, new business, business revitalization, business succession, social business, overseas expansion, and agricultural, forestry, and fisheries business operators, promotion of digital transformation (DX), and environment and energy measures including decarbonization with an eye toward the post-COVID era.

A. Support for business start-ups and new businesses.
Contributing to the creation and development of start-ups, the leaders of innovation.

(a) Contribute to regional innovation and job creation through increased support to business start-ups.
New development loans (number of companies) (before establishment and within one year after establishment): 25,000
(b) Reinforce the provision of capital to start-ups in the seed and early stages and support business development through events such as the Venture Meet-Up from the Local Region JFC Version.
(c) Proactively supply funds and support growth of SMEs engaged in new business activities. Number of companies contracted with for provision of loans to companies engaged in new business and entrepreneurs:1,250
(d) Promote the Start-up Support Package, a pillar of growth support, by reinforcing the provision of capital to start-ups, providing opportunities for business talks, and taking other measures.
(e) Reinforce collaboration with institutions such as universities engaged in venture capital and innovation creation that support start-ups and new business.
(f) Hosting of High School Student Business Plan Grand Prix.

B. Support for business revitalization.

(a) Strengthen support functions for business revitalization.
Number of loan agreements with businesses undertaking business restructuring: 2,300
(b) Enhanced collaboration with Revitalization Support Council, etc.
(c) Promotion and reinforcement of fundamental revitalization financing support such as DDS and DES.
(d) Appropriately implement operations of two-step loans for business restructuring and business adaptation (excluding decarbonization) pursuant to the Industrial Competitiveness Enhancement Act.

C. Support for business succession.

(a) Promote consulting including matching through collaboration with relevant organizations such as business succession support organizations, private financial institutions, tax accountants, and other outside professionals.
(b) Proactively participate in regional business succession networks and contribute to the revitalization of networks.
(c) Support funding needs for diverse business succession.

D. Social business support.

(a) Response to requests for funds.
Number of loans to businesses engaged in social business: 11,000
(b) Expansion of support services for the resolution of business challenges.
(c) Strengthen coordination with organizations supporting social business.

E. Support for overseas expansion.

(a) Facilitate support for fundraising by SMEs engaged in overseas development and steadily provide direct financing support for overseas subsidiaries (Standby Letter of Credit Program, cross-border loans).
Number of loan agreements with businesses undertaking overseas development: 600
(b) Support the overseas development of micro/small businesses planning to expand sales channels through use of crossborder EC and other means.
Number of loans with businesses conducting overseas development: 1,200
(c) Provide support integrated with subsidies and tax systems to agricultural, forestry and fisheries business operators, food businesses, etc. that plan to enhance their export capabilities in accordance with the Act on Facilitating the Export of Agricultural, Forestry, and Fishery Products and Food and the government's strategy on expanding exports while collaborating with regional agricultural bureaus, prefectural governments, private financing institutions, and others.
Number of loans to businesses engaged in exporting agricultural, forestry and fishery, and food products: 230
(d) Provide information to customers seeking to expand overseas.
(e) Collaboration with institutions that support overseas expansion.

F. Support for new expansion by agricultural, forestry, and fisheries businesses.

(a) Support business improvement initiatives for corporations and large family businesses while utilizing valuation techniques with an emphasis on profitability.
Number of loans provided to agricultural management entities seeking to grow: 6,200
(b) Support efforts to secure new agricultural leaders.
Number of borrowers of people entering agricultural management and agricultural management entities hiring new farmers: 2,000
(c) Support for agricultural, forestry, and fishery businesses initiatives to improve businesses in the "Sixth Industrialization" sector.
(d) Support efforts to promote the use of domestic timber by large-scale wood-related businesses.
(e) Support fishery production enhancement, construction of ships to replace fishing boats, and enhancement of cultivation foundations.
(f) Support for food businesses engaged in expansion of domestic and foreign demand through increased collaboration with agricultural, forestry, and fishery businesses.
(g) Provide information such as policy and technology information and results of various surveys.

G. Support for DX and digitalization.

(a) Support for DX and digitalization by SMEs and micro/small businesses.
(b) Support for smart technologies used by agriculture, forestry and fishery businesses and measures using eMAFF.

H. Support environmental and energy measures.

(a) Promote initiatives supporting environmental and energy measures by SMEs and micro/small businesses.
(b) Support environmental and energy measures by agricultural, forestry and fisheries business operators.
(c) Gather and provide information to promote understanding inside and outside JFC regarding environmental and energy measures.
(d) Appropriate implementation of two-step loans for specific businesses based on the Low Carbon Investment Promotion Act.
(e) Appropriately implement operations of two-step loans and interest subsidies for business adaptation (decarbonization) pursuant to the Industrial Competitiveness Enhancement Act.

I. Contribute to equal educational opportunities.

(a) Disseminate information on educational loans to reduce the burdens of educational expenses.
(b) Effectively use media to conduct public relations activities.
(c) Appropriately respond to diverse consultations needs.

J. Support development, provision, and introduction of advanced information and communications systems.

Appropriately implement two-step loans for development, supply, and so on based on the Act on Promotion of Developing/Supplying and Introducing Systems Making Use of Specified Advanced Information Communication Technologies.

3.Contribution to local and regional revitalization through collaboration with local communities

(1) Reinforce collaboration with local government through active participation in regional comprehensive strategies.

A. Contribute to implementation and promotion of various measures relating to local comprehensive strategies and the like.
B. Provide information to local governments.

(2) Provision of useful service that meets customer and local needs.

A. Promote efforts to utilize our nationwide network of 152 branches.
B. Promote matching customers.
C. Holding of consultancy meetings and seminars.

(3) Performance of the role of connecting relevant organizations.

A. Adopt a bird's eye perspective of regions, perform functions unique to JFC including collaborating with various relevant organizations, and promote measures in close partnership with relevant organizations to solve the problems that clients and regions are facing including business maintenance and management during the COVID-19 crisis.
B. Reinforce collaboration with relevant organizations including Chambers of Commerce and Industry, Societies of Commerce and Industry, and tax accountants.

4.Improve customer service and demonstrate policy significance

(1) Promote various measures such as enhancing the consultation capability to improve services and appropriately perform a risk-taking function.

A. Appropriately perform a risk-taking function.
B. Provide useful information consistent with customer and local needs and enhance consultation capability.

(a) Provide to clients that have been affected by the COVID-19 useful information and conduct consulting that contributes to business continuity and supports growth in cooperation with private financial institutions with an eye toward the post-COVID era.
(b) Strengthen management support in combination with financing through financial assessments, income and expenditure simulations, etc.
(c) Promote appropriate proposals and advice for customers.
Promote the provision of customer support tools tailored to the needs of customers.
(d) Cooperation with network of outside specialists.

C. Promote branch management and various service improvements from the customer's point of view through implementation of customer satisfaction surveys, etc.

(2) Promote public relations activities such as through strengthening information dissemination.

A. Promote public relations activities with mass media.
B. Promote public relations activities by enhancing the content of the PR magazine.
C. Promote public relations activities by utilizing the special characteristics of various media such as the Internet.

(3) Enhance surveys and research and reinforce policy proposals to further demonstrate think tank functions.

A. Pursue high research levels through original methods that utilize field work unique to JFC thanks to its large number of SME clients.

(a) Regularly conduct economic conditions research.
(b) Conduct thematic surveys and publish research results based on these surveys.

B. Improve evaluations of think tanks through the strengthening of external communication capabilities.

(a) Edit and publish periodical publications, books, etc.
(b) Expand opportunities for external presentation of research results.
(c) Disseminate research results through lectures, etc. at universities.
(d) General academic publication of survey data.

C. Strengthen and expand networks with outside organizations.

(a) Hold and participate in domestic and international research presentations, information exchange sessions, etc.
(b) Participate in external research groups and research projects.
(c) Enhance personnel exchanges with outside organizations by individual researchers.

D. Support measures for the provision of advice on SME policy in Japan.

(a) Conduct surveys and research with abundant policy implications.
(b) Collaborate with government agencies, relevant organizations, and business units engaged in policy advice.

(4) Efforts to improve systems and measures through policy recommendations that conform to customer feedback and the needs on-site.

A. Collect the views expressed by customers, and reflect them in policy recommendations and measures.
Allow customer trends and the opinions of SMEs, micro/small businesses, and agricultural, forestry, and fisheries businesses to be reflected in our business management (new establishment and improvement of loan program).
B. Understand the challenges for the region, and promote policy recommendations aimed at resolving them.
Gain a detailed understanding the needs of the region regarding policy-based finance, and allow them to be reflected in policy recommendation and business management.

5.Appropriate management of credit risk

Appropriately manage credit risks taking into consideration outstanding loan balances and the substantial increase in clients in conjunction with COVID-19 Special Loan Program.

A. Implementation of appropriate credit management.
B. Appropriate management of credit cost.
C. Reinforcement of insurance underwriting risk management system.
D. Maintenance of a risk management system for loss compensation transactions.

＜Monitoring items＞
Initial default rate (%)
Upward-downward transition of debtor segment (number, etc.) [Agriculture and forestry/SMEs]
Credit related expense ratio (%)

Organizational Plans

1.Promote digitalization

A. Steadily promote digitalization in accordance with a digitalization promotion plan and other plans.

(a) Steadily promote digitalization measures, such as expanding the functions of our membership-based online services (JFC Direct) and introduce electronic contracts, in order to achieve the business strategies of the JFC as a whole and respond to changes in the JFC's environment.
(b) Steadily implement system update work and investigate optimal information systems in order to achieve stable operation of systems in the future and raise development efficiency.
(c) Step-by-step shift systems created in data centers to cloud infrastructure.
(d) Determine the trends of other financial institutions, research the latest IT technologies such as AI, investigate optimal IT use by JFC in light of responses during the COVID-19 crisis, and promote digitalization.
(e) Improve system functions according to the operations of each business unit.

B. Reinforce preparations relating to information systems in anticipation of emergencies.
Undertake system development including increasing the capacity to process online applications in order to ensure continued and effective operations even during emergencies.

C. Enhance system quality and implement comprehensive security measures.

(a) Prepare high-quality requirements definitions and carry out detailed system tests through collaboration by business divisions and the IT department.
(b) Reinforce effective security measures based on the status of cyber security and the latest developments in technology.
(c) Greater efficiency in systems development, taking stable operation into consideration.
(d) Promote smooth and efficient system operation.

D. Reinforce internal stance to promote digitalization.

(a) Develop digital human resources who can create strategies and business models that use digital technologies to contribute to improving customer service and improving operational efficiency.
(b) Cultivate personnel who can enhance the quality of and stable operate information systems and respond to cyber security threats.
(c) Improve employee IT literacy and strengthen the support organization.
(d) Recruit mid-career IT specialist personnel.

E. Appropriate enforcement of system audits.

2.Enhancing branch office functions

A. The branch office manager will faithfully exhibit its role.

The branch office manager will carefully ascertain the circumstances surrounding regions and businesses and adopt a bird's-eye perspective of regions to work towards solving their problems.

B. Strengthen our nationwide network of 152 branches.

C. Continuously strengthen the branch management framework based on a bottom-up approach to management including implementation of measures intended to solve branch operational issues that have become clear as a result of responses to the COVID-19 pandemic.

3.Conduct efficient and effective operations

Solve organizational management problems that were noticed as a result of responses to the COVID-19 crisis.

A. Review administrative work and take other measures to enable timely and detailed responses to the rapid increase in applications.
B. Broadly collect opinions and requests from worksites and implement measures to use them in operational improvements.
C. Implement fair procurement procedures.
D. Improve branches and other facilities based on the needs of customers and branches.
E. Implement environmentally-conscious measures including encouraging the use of products and services that contribute to reduced environmental impact.
F. Implementation of appropriate expense management.

4.Foster and utilize human resources

A. Enhance staff training for the realization of high-quality customer service and to nurture high-level management capabilities and expertise.

(a) Consensus and understanding of the basic philosophy, management policy, and business management plan.
Build a consensus and raise understanding including background through conferences, training, study groups, and so on.

① Employee awareness survey item "Awareness level of basic philosophy and management policy" 100%
② Employee awareness survey item "Awareness level of business management plan" 100%

(b) Establish a training system that is consistent for all employees from new personnel to senior management.

(ⅰ) Collaborate to implement a personal development system, and training at all levels in addition to those particular to each business unit.
(ⅱ) Promote self-initiated measures that contribute to regional coordination and client support.
(ⅲ) Promote the use of online tools and the like through training.

(ⅰ) Carry out smooth implementation and content enhancement for human resources academy courses.
(ⅱ) Quality content for level-specific training (newly appointed senior level position and above).
(ⅲ) Perform multifaceted observations and provide feedback on the results.

B. Appropriately operate personnel payroll system.

(a) Efforts to operate appropriately personnel payroll system.

(ⅰ) Conduct monitoring of the operational status of human resource and payroll systems (special transfer system, regional comprehensive employment system, re-employment system, etc.).

① Employee awareness survey item "Monitoring of business objectives (properly monitor with sufficient interviewing)" 80%
② Employee awareness survey item "Feedback on personnel evaluations (sufficient)" 90%

(ⅱ) Monitor the operational status of personnel changes (transfer cycles, transfers over wide areas, consecutive transfers unaccompanied by family, etc.).

(b) Efficiently execute salary payment work, etc.

C. Promote effective utilization of human resources.

(a) Make proactive use of personnel transfers between business units, etc.
(b) Expand scope of activities for area employment through administrative employment training systems, etc.
(c) Increase awareness of recruitment activities, etc.
(d) Promote further utilization of senior employees.

D. Increase expertise.

(a) Implement internal promotion and hiring of experienced personnel.
(b) Promote training to improve expertise.
(c) Promote programs to help individuals obtain SME Management Consultant and Agricultural, Forestry and Fishery Management Advisor certifications, and effectively utilize those certified.
(d) Implement corporate dispatch training.

＜Monitoring items＞

?Number of certified SME management consultants.
?Number of certified Agricultural, Forestry and Fishery Management Advisors.

5.Promote diversity and improve the workplace environment

A. Create a workplace where diverse human resources can fulfill their potential.

(a) Implement measures to promote diversity at the Head Office and branch offices.

(ⅰ) Further promote proactive participation by all employees and diversity.
(ⅱ) Raise employee awareness to create workplaces that employees find rewarding.

(b) Practice work-life management (WLM).

(ⅰ) Encourage the further use of systems that enable flexible work style including telework.
(ⅱ) Promote a varied working style and increase working time productivity.
(ⅲ) Encourage men to participate in housework, childcare, and family care.
Ratio of male employees to take vacation time or leave for at least one month for childcare. 90%

(ⅰ) Conduct training on health and encourage medical examinations pursuant to specified health guidance.
(ⅱ) Enforce 2 no-overtime days per week.
Rate of enforcement of 2 no-overtime days per week. 90%

(d) Understand management issues through employee awareness surveys.

B. Promote women's empowerment including actively appointing women to management positions.

(a) Implement measures for career development of women.

(b) Conduct training and implement other measures to support the development of management candidates in order to actively appoint women to management position.

① Ratio of female managers 7% (By April, 2023)
② Employee awareness survey item "Management support to develop capabilities of female employees (females)" 80%

＜Monitoring items＞

Ratio of numbers of female manager and manager candidates (female senior management positions) in each year compared to the number of female manager positions equivalent to plan values.

C. Strengthen harassment prevention.

Strengthen measures to prevent harassment (same initiative as "6. Establishment and strengthening risk management, compliance structures, and risk management framework").

6.Establishment and strengthening of risk management and compliance structures

A. Carry out appropriate risk management in response to policy requests.

(a) Formulate and ensure implementation of risk management programs.
(b) Continuously monitoring of the status of risk management including the effects of the COVID-19 crisis on credit risks by the Corporate Governance Committee and so on.

B. Carry out appropriate monitoring together with establishing and strengthening compliance awareness.

(a) Formulate and ensure implementation of compliance programs.
(b) Continuously monitoring of the status of implementation of compliance programs by the Corporate Governance Committee and so on.
(c) Reinforce the attitude of exclusion of antisocial forces (members of organized crime groups and their supports) and other comparable persons (persons participating in fraud and persons subject to economic sanctions).
(d) Reinforce compliance awareness to ensure that officers and employees maintain high ethical standards as members of a policy-based financial institution and act responsibly to uphold the reputation of the JFC.
(e) Thorough reporting and consultation concerning compliance.
(f) Branch managers should properly fulfill their roles in handling compliance concerns.

C. Further strengthen risk management framework.

(a) Promote understanding of response procedures regarding COVID-19 at all workplaces and continue implementing rapid responses.
(b) Based on responses to COVID-19, reinforce BCP with the spread of infectious disease as a possible disaster.
(c) Reinforce BCP and continue conducting disaster response headquarters training and safety confirmation training based on the assumption of earthquakes occurring in the Tokyo Metropolitan area.
(d) Raise the crisis awareness of each employee and conduct training and drills to prepare for the risk of damage in each region.
(e) Branch managers should properly fulfill their roles in handling risk management.
(f) Prepare contingency arrangements including personnel systems for emergency situations.

Business and Management Plan