AIFUL

AIFUL established Businext as a joint venture with Sumitomo Trust & Banking in 2001 with the aim of targeting this undeveloped middle-risk business loan market. The company has been able to rapidly expand unsecured and unguaranteed loans by developing two types of scoring systems, one for sole proprietorships and the other for corporations. Loan balances totaled ,59.7 billion at the end of September 2005 to maintain high growth of 59.7% year-on-year. AIFUL made City's, which has expertise in the high-risk segment, a subsidiary in October 2002. This has allowed us to develop an organization capable of responding to a wide range of customers in the business loan market, with Businext handling the middle-risk segment and City's active in the high-risk segment. City's is currently expanding its branch network from its home territory in western Japan to the Kanto and Tohoku regions. City's has also maintained high growth, with loan balances totaling ,57.1 billion at the end of September 2005, for an increase of 57.4% year-on-year. Additionally, AIFUL's business loans primarily target sole proprietorships, and we have used Businext's scoring system to form business loan guarantee partnerships with several banks. We plan to partner with 40 financial institutions by the end of September 2005. We are stepping up efforts in the small and medium-sized business loan segment by approaching small and medium-sized businesses and sole proprietorships from a variety of directions. Going forward, we believe a bank brand name is essential for further growth, and we are looking to establish a bank specializing in small and medium-sized business loans through a bank acquisition. We hope to secure an advantage by moving forward as quickly as possible.