Japanese Consumer Loans

This is an interesting article on how consumer loans are handled in Japan.

Things look better for the banking business in Japan now than they have
for a long time, but truth be told, the recovery has been a long time coming.
However, consumer lenders in Japan such as Acom, Aiful, Promise, Takefuji, and
Honobono Lake have always had a pretty good deal over the same period.

Debt in Japan is relatively low-cost, and if you can lend out money at
interest rates greater than 20%, you have a pretty good business on your
hands. In recent years, some of the large consumer lenders partnered up with large banks in Japan, including Acom with Mitsubishi UFJ Financial Group (NYSE: MTU - News) and Promise with Sumitomo-Mitsui Financial Group providing additional, and likely cheaper, capital. It's worth noting that the economics of the business are attractive enough that General Electric (NYSE: GE - News), through its consumer finance business, owns Honobono Lake, and Citigroup (NYSE: C - News) has a division of its own, CFJ, as well.

Now that is a good lending rate. I wonder how the credit card business is in Japan. If access to consumer loans is so easy it seems that people won't use a credit card when it comes to a big purchase. If they want to go on a trip to Hawaii or something they can pop into Promise and pick up one of these loans and spend the next few years paying it down. This industry would be a very interesting one to further look into.