New research shows an increase in bankruptcies among small-and-medium sized Japanese companies that received coronavirus relief loans.

Smaller firms and individual business owners were offered what were effectively interest-free and collateral-free loans to help them weather the impact of the pandemic.

Government-affiliated and private banks provided the loans under the system set up in March 2020. Central and prefectural governments agreed to pay the interest for three years.

Private credit research company Teikoku Databank says 236 recipients of relief loans went under or began liquidation proceedings in the first five months of this year. That is up 50 percent from the same period last year. The firms each had debts of at least 10 million yen, or about 70,000 dollars.

There have now been 802 such bankruptcies, with the combined value of unrecoverable loans reaching an estimated 47 billion yen or about 330 million dollars.

Teikoku Databank says businesses are struggling to cope with rising prices and a labor shortage in addition to their loan repayments.