Business Description

The primary business targets of SFCG are small and medium-sized companies and sole proprietorships that comprise more than 99% of the 6.12 million companies in Japan. The relief fund demands of small and medium-sized companies are ever present regardless of economic conditions. However, banks do not adequately address the funding demands of small and medium-sized companies. Many of these companies lack adequate collateral and are faced with many problems including the inability to procure all necessary funds, and the need for a certain amount of time before banks can make a judgment on providing financing that results in funds being procured too late. We believe that the purpose of our existence is to speedily respond to the funding demands of these companies and we recognize this to be our societal role.

As a rule, an SFCG researches the funding needs of companies via database-based telephone marketing and promptly visiting concerned companies when funding needs are confirmed. This is followed by ascertaining specific details of funding needs and the obtaining necessary information and materials to screen the firm. The concerned case is then sent on to the head office’s Credit Control Department. We speedily fulfill he demands of our customers by realizing a system in which financing can be provided in 1 to 3 days after the application is received.

Sales Progress and Results

The Japanese economy continued to face a difficult situation. This arose from the increased sense of opacity concerning the future of the economy arising from greater fears about a decelerating global economy due to the Iraq War, SARS and other problems combined with weak capital investment by corporations and personal consumption. Although there were signs of a recovery in the stock market, it continued to be difficult for small and medium-sized firms to procure funds from financial institutions as a result of the large, though decreasing, number of corporate bankruptcies, the rapid increase in personal bankruptcies and other factors pointing to increased severity in the actual economy. Within this business environment, we have eliminated inefficiencies arising from duplicated area marketing by establishing a branch company system to heighten our operating efficiency. Furthermore, we reviewed our branch network with the aim of implementing thorough employee education as needed, due to concentrated human resources. As a result, we integrated and scrapped 13 branches as of the end of the fiscal year to create a branch network of 118 branches. In addition, we have implemented even stronger credit management with the impact on small and medium-sized firms and guarantors resulting from the increase in personal bankruptcies in mind. Thus we have striven to reduce credit risk.

As for fund procurement, we worked to strengthen our financial base by preparing for the unexpected through the securing of liquidity on hand and maintaining of a certain level of cash and deposit balance. As a result, shareholders’ equity at the end of the year reached 226,048 million yen and shareholders’ equity ratio was 62.2%. The outstanding balance of financing at the end of this fiscal year was 33,025 million yen (increase of 2.0%) for discounted commercial notes and 283,104 million yen (increase of 3.9%) in operational loans, a total of 319,130 million yen (increase of 3.7%).

Operating revenues totaled 47,489 million yen (decrease of 5.6%) but ordinary profit reached 13,034 million yen through a compression of expenses, an increase of 6.5%, and net income reached 6,832 million yen (increase of 0.1%). This was the third consecutive year with an increase in profit.