不良債権

• Reading: ふりょうさいけん
• Romaji: furyōsaiken
• Kanji breakdown: 不 (fu) — not; 良 (ryō/yoi) — good; 債 (sai) — debt, obligation; 権 (ken) — right, claim
• Pronunciation: /ɸɯ.ɾjoː.sa.i.ken/

Meaning

Non-performing loan (NPL); bad debt. A loan or receivable where repayment is unlikely due to the borrower's default or financial distress.

Loans where the borrower has stopped making payments or where full recovery is considered doubtful. A major concern for banking stability; Japan's 1990s financial crisis was largely driven by 不良債権 accumulated during the asset bubble. Banks are required to write off or provision against NPLs under both Japanese and international accounting standards. Synonymous with the English NPL (non-performing loan).

Examples

1. バブル崩壊後に銀行が多額の不良債権を抱えた。 Banks were left holding enormous volumes of non-performing loans after the asset bubble collapsed.
2. 不良債権の処理が進まなければ金融システムは安定しない。 The financial system cannot stabilise unless bad debts are dealt with.
3. 中小企業向け融資の不良債権化が増加傾向にある。 Non-performing loans on lending to small and medium-sized enterprises are on an upward trend.

Usage Guide

Context: banking, finance, economics, corporate governance

Tone: formal

Origin & History

Compound of 不良 (bad, defective; 不 = not + 良 = good) and 債権 (credit, receivable, financial claim). Literally 'defective receivable' — a debt that cannot properly perform its function.

Cultural Context

Era: Modern

Generation: Finance professionals

Social background: Banking/Finance