In late December, MUFG announced it had invested US$200 million in Jakarta-based fintech Akulaku, a strategic tie-up that will see the two companies expand into new markets and products together in 2023. In early 2022, Akulaku raised US$100 million in funding from Siam Commercial Bank as part of another strategic investment. Akulaku, which operates in the Philippines and Malaysia in addition to Indonesia, offers a virtual credit card and installment shopping platform, as well as an investment platform and neobank.
MUFG wants to use its Akulaku investment to grow its presence in Southeast Asia, among the largest and promising regions in the world for digital financial services. MUFG has limited growth prospects in Japan given ultra-low interest rates and an aging population that is now the world’s most elderly. Akulaku is already a rising star in its home market of Indonesia, the largest economy in the region and also home to the biggest unbanked population in Southeast Asia: 81 million people.
For Akulaku, partnering with MUFG will give it access to the vast resources of Japan’s largest bank. As part of MUFG’s strategic investment, Akulaku has agreed to work with MUFG companies in Southeast Asia on tech, product development, financing and distribution.
The Akulaku investment follows MUFG’s November acquisition of the Philippine and Indonesian units of Dutch consumer finance company Home Credit BV (HC) for about 596 million euros. HC's main services include point-of-sales loans, offered to customers for their purchases of goods and services at the point of sale both physical and online.
According to Nikkei Asia, MUFG’s next fintech acquisition will likely be the Japanese BNPL firm Kanmu, in the spring of 2023. Under the conditions of the deal, MUFG plans to absorb Kanmu as a consolidated subsidiary in the spring of 2023, and begin issuing debit cards with post-payment capabilities several years later.
If the deal goes through, MUFG will be the first of Japan’s three largest lenders to enter the segment. Given BNPL’s popularity with younger consumers, MUFG sees the segment as an important avenue for its future growth. The 11-year-old Kanmu app had been downloaded more than 6 million times as of the end of September, with teens and those in their 20s accounting for just over 50% of its total downloads.