UPDATE 1-Japan plans tough laws for moneylending market-Nikkei

June 18 (Reuters) - Japan's financial watchdog will soon enforce measures designed to protect borrowers from unscrupulous moneylenders by more strictly regulating new market entrants, the Nikkei business daily reported.

The Financial Services Agency will increase a lender's minimum net asset value to 20 million yen ($207,700) from 5 million yen, raising the bar for new entrants, the paper said.

The revised moneylending business law, which was issued in December 2006 to tackle the problem of excessive debt harbored by some borrowers, is being enacted in gradual stages, with the third of four stages beginning Thursday, the Nikkei said.

The regulator will also launch a certification exam program for those engaging in this business and moneylenders will eventually be required to have a certain number of employees who have passed the necessary exams at each branch they operate, the paper said.

From next June, the revised law will take full effect, subjecting lenders to such requirements as limiting loans to one-third or less of a borrower's annual income, the Nikkei said.

Also, the cap on interest rates that lenders will be allowed to charge will be lowered to 20 percent from the current 29.2 percent, the business daily said. ($1=96.31 Yen) (Reporting by Supantha Mukherjee in Bangalore; Editing by Ratul Ray Chaudhuri)