Japanese credit card player Credit Saison is targeting Southeast Asia and India in a move beyond its home base, «Nikkei Asia» reported Wednesday.
Katsumi Mizuno, Credit Saison's president and chief operating officer, told «Nikkei Asia» the credit card business model is becoming outdated.
The credit card provider has been expanding outside of Japan via tie-ups with local companies, such as regional ride-hailing and food-delivery giant Grab, to move into new forms of digital lending, Nikkei Asia reported Wednesday.
Grab Tie-Up
The Grab tie-up «made us understand that we could grow our lending business by providing capital to these new operators, rather than simply investing in their equities,» Mizuno told Nikkei Asia, noting the deal boosted Credit Saison’s profile in the region.
In addition, in 2015, the Japanese company entered a joint venture with Ho Chi Minh City Development Bank, one of Vietnam’s largest banks, to offer consumer loans, the report said. For the fiscal year ended 31 March 2021, Credit Saison’s Vietnam business contributed around 1.3 billion yen (US$10.13 million) to the 48 billion yen (US$373.86 million) total operating profit, the report said.
Southeast Asia Lending Growth
There's a lot of potential growth to tap for lenders in Southeast Asia.
Of the around 400 million adults in Southeast Asia, around 198 million are unbanked -- or don’t have a bank account -- while another 98 million are underbanked, with a bank account, but without access to credit, investments and insurance, according to the e-Conomy SEA 2019 report published by Google, Temasek and Bain & Co. in October 2019, prior to the start of the Covid-19 pandemic.
Digital lending to consumers in Southeast Asia is expected to rise to US$92 billion by 2025, up from US$33 billion in 2021, according to the e-Conomy SEA report published by Google, Temasek and Bain & Co. in November 2021.
Investing in Indonesia Fintech
Earlier this month, Credit Saison said it invested US$80 million in debt and equity in Indonesian digital lending startup JULO.
«The investment from Credit Saison is part of the company’s continuous efforts to introduce its financial services foundation to high-growth fintechs outside of Japan via a combination of capital and close operational partnerships,» the press release from Credit Saison and JULO said.
That investment followed a «DealStreetAsia» report in February that Credit Saison had committed up to US$60 million to JULO, valuing the company at US$200 million.
