Japan’s Credit Saison tastes success in India, to expand loan book

Japan’s Credit Saison tastes success in India, to expand loan book

Mumbai: Japan’s Credit Saison would harness India‘s unique identification and data infrastructure to expand its loan book locally, building on early successes since the financier entered Asia’s No. 3 economy after Covid.

The non-banking finance company has built a loan book of ₹12,000 crore by lending to individuals, small and medium enterprises and wholesale credit to other lenders.

Presha Paragash, CEO of Credit Saison India, said the company will form new partnerships and diversify into new products like loan against property (LAP) and small business loans as it expects to grow 30-40% in the country.

About 52% of its ₹12,000 crore loan book is made up of loans sourced through the co-lending model. The company has 25 co-lending partners which include the likes of fintechs like Cred, KreditBee, PaisaBazaar, Groww and Airtel Digital. Besides co-lending, some of these companies also source loans for Credit Saison for a fee which are underwritten by the company.

Kosuke Mori, head of global business division at the Japanese parent said India is the most important market for the company with its playbook being emulated in other emerging markets like Mexico, Brazil and Indonesia.

“India was the eureka moment for us and is the best place due to its market potential and lending ecosystem like Aadhaar, UPI and NACH payment system, account aggregator and developed credit bureaus. We have identified markets globally with similar data or identification infrastructures because if the market is like India, we can do a lot,” Mori said explaining that both Brazil and Indonesia have similar instant payment systems in Pix and QRIS, respectively.Backed by large Japanese and global institutional investors, Credit Saison is in diverse businesses like asset management, real estate, insurance and lifestyle with digital lending mostly done in emerging markets. Paragash said 70% of the company’s book consists of consumer loans and the plan is now to diversify its loan book further.

“We have a unique combination of the large parent with an AAA credit rating and a fintech leadership mindset which has worked very well. We have recently started large ticket business loans with a ticket size of ₹25 lakh and also small business loans of ₹5 lakh. Right now, almost all of our book is unsecured and we plan to start a secured loan against property business with a ticket size of around ₹35 lakh,” Paragash said.

The company, which started as a pure-play digital lending business now has opened 45 branches to source these high-ticket loans and expects to end the current fiscal with 75 branches, mostly in tier III and IV cities.

With a capital adequacy of over 30% and gross NPA of 0.85% at the end of March 2024, Paragash said the company is confident that its early monitoring-based risk assessment, which has worked for the last four years, will also work in the future.

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