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When Suruga Bank, a small lender based in the agricultural area of Shizuoka southwest of Tokyo, began marketing mortgages to working women in August, 2000, it was considered a risky and unusual move. Although it sounds outlandish to Western ears, even at that late date banks almost entirely excluded women from taking mortgage loans. After all, they figured -- without much evidence -- women might get pregnant, quit their jobs, and have to renegotiate their loans. Advertisement

Four years later, nearly 3,500 women hold $550 million in Suruga mortgages, or about 5% of the bank's total home loans. Guess what? Their default rate is lower than that of the salarymen the bank used to prefer. And Suruga is making more money on women because they prefer flexible mortgages that charge higher rates but offer dispensations such as early repayment without penalties. "Suruga is using its first-mover advantage to carve out a lucrative niche," says Hironari Nozaki, a bank analyst at Nikko Citigroup Ltd. in Tokyo. The number of women signing up for mortgages is increasing 10% a year, which helped to boost Suruga's net income last year by 20%, to $80 million, on $630 million in revenues.

Other banks are beginning to see the value of Japan's 27 million working women. In April, Chuo Mitsui Trust in Tokyo quietly set up a flexible mortgage program for women called Exerina. Chuo Mitsui issued 14.5% of its mortgages to women from Oct. 1, 2003, to Mar. 31, compared with 12.5% during the previous six months. Last summer, to push its mortgages, Tokyo Star Bank, owned by Lone Star Group of the U.S., started holding seminars for women. Osaka's Resona, Japan's fifth-largest banking group, has had its own women-oriented mortgage program since 2002.

The programs are a belated reaction to a dramatic social change in Japan. Today about a quarter of Japanese women in their 30s are single and working. That number rises to over 30% in Tokyo. In one recent survey of single women aged 35 to 54, half indicated that they had no intention of marrying. "Women work and get paid, so why wouldn't they want their own place?" says Kenji Nakahara, head of consumer loan research at Chuo Mitsui.

FLEXIBLE TERMS
Small wonder the banks are starting to target women. Chuo Mitsui's Exerina mortgage, for example, is designed to mesh with women's changing lifestyles. It allows a woman to borrow up to $460,000 to buy an apartment in a major metropolitan area at market rates, even if she is employed only on a contract basis -- as 14.5 million workers were in Japan in 2002. If a borrower marries and moves into a new home, the bank allows her to sublet her apartment and repay the mortgage early without penalty. If she gets pregnant, the interest rate drops by one basis point for one year. Resona's mortgage plan includes a one-year repayment holiday in case the borrower gets pregnant or must care for elderly relatives.

Although the loans to women have proved safe and lucrative, big banks are still targeting men. True, mortgages are becoming a hugely competitive business because of falling demand for corporate loans and low returns on government bonds. But the giants -- Mizuho, Bank of Tokyo-Mitsubishi, UFJ, and Sumitomo Mitsui Banking -- are only just starting a glacial process of change.

Nevertheless, the opportunities for Japan's women to buy places they can call home are far greater than ever before. Noriko Ito, 43, who took out a $125,000, variable-rate mortgage on her three-room apartment in Mitaka, Tokyo, in 1997, remembers how hard it was to find any bank willing to lend to her. In the end, "I got a loan because I'd worked at the same advertising company for many years," recalls Ito. "Otherwise, it would have been very tough." Today, lending is thankfully becoming a matter of profits, not gender.

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