Using the data of individual loan contracts extended by the government owned Japan Finance Corporation for Small and Medium Enterprise (JASME), we examine whether the JASME's lending from December 1997 thorough March 1999 mitigated the credit crunch. We find that on average the JASME offset more...

Using the contract level data, we find that the lending by a Japanese state owned lending institution during the period of the credit crunch mitigated a firm's loss of borrowing from its main bank. We further find that the state owned institution's lending instrumented by the main bank's lending...