Small Investments Supporting Local Revitalization: Japan Communications Innovative Companies Changing the Future (2) Part 1

Try to imagine this: you are the owner of a small or medium-sized business who wants to add new equipment, or a boss who has unfortunately been hit by a wind disaster and is worrying about how to rebuild your factory. How would you raise funds? Get financing from a bank? Borrow money from relatives and friends? Apply for a government subsidy? Or simply go online and do "crowdfunding"?

In Japan, you have another option: micro-investment (マイクロ).

So-called micro-investment means setting a minimum amount of only tens of thousands of yen and raising funds from an unspecified large number of people in order to expand a business or complete a new product. Once sales are reached, repayment of investors' principal and interest begins. The investment threshold is low, and anyone can easily participate in and support a business they like.

"Micro-investment" and "crowdfunding" are different in nature: crowdfunding, which has become very popular in Taiwan, China in recent years, also raises funds from an unspecified large number of people through the internet, but the similar "crowdfunding" currently in Taiwan, China and Japan belongs to the "purchase type" or "donation type" with no monetary return and is not restricted by financial regulations. Music Securities' micro-investment, by contrast, is "debt-type" crowdfunding. Starting in 2008, Japan stipulated that micro-investment must comply with financial transaction regulations, operators must obtain a license, and regular reporting is required.

"Music Securities": fifteen years of micro-investment

(The [Japan Communications] series of articles is funded by a special project grant from the Jianzhen Environmental Education Foundation, but the foundation does not interfere at all with news topic selection or interview writing, ensuring news independence.)

(To read the Japan Communications series, please click here)