TOKYO, May 22 (Xinhua) -- The Bank of Japan (BOJ) Friday said it would introduce a new measure to help small and medium-sized businesses (SMEs) affected by the COVID-19 pandemic by increasing provisions by 30 trillion yen (278 billion U.S. dollars) to financial institutions.
By providing the additional funds to financial institutions such as regional banks, with the program starting in June, the central bank hopes these institutions in turn will be encouraged to increase lending to SMEs and sole proprietors.
The institutions will also be incentivized by the bank paying 0.1 percent interest on the loans made to SMEs and individual business owners.
The BOJ also said that the purchase period of corporate bonds and commercial paper will be extended from late September under an initial plan, until the end of March.
The BOJ's latest 30 trillion yen program to help small firms struggling amid the COVID-19 pandemic comes on the heels of a 25 trillion yen loan program rolled out in late April to help larger companies, bringing the bank's total financial support for businesses to 75 trillion yen ((697 billion U.S. dollars).
At the BOJ's extraordinary policy meeting held on Friday, the first unscheduled meeting since November 2011, the central bank also opted to maintain its current ultra-easy monetary policy and kept its short-term interest rates at minus 0.1 percent.
The bank's long-term rates would continue to be guided at around zero percent, with unlimited government bond purchases, the BOJ said.
"The Bank will continue to support financing mainly of firms and to maintain stability in financial markets. We will not hesitate to take additional easing measures if necessary," the BOJ said in a statement issued Friday.