Global Business: A Decade of Tackling Challenges

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This year marks about 10 years since the full-scale launch of the Global Business. Please reflect on the past and tell us about the strategies and goals in the New Medium-term Management Plan.

The first five years after we launched the Global Business were a repeating cycle of trial and error. We were looking to expand our credit card business overseas at the time. However, we found it difficult to bring over the Japanese model as it was because some countries require a banking license. In addition, at that time, our basic strategy was to establish joint ventures with local companies under the leadership of our Head Office, and we launched our operations in Vietnam and Indonesia based on this strategy. The turning point came in 2018, when we engaged in a joint venture with Grab, a leading ride hailing service in Southeast Asia. By coming into contact with Grab’s management team, including its founder, I was able to experience the dynamism of the company’s management, and learn about the speed and human resource strategies that only a unicorn company can provide. This experience became the cornerstone for the launch of our India business, which we were also pursuing at the time, and marked a pivotal moment for strategies that were locally led. In this way, we have learned numerous lessons and discovered a winning formula in the last five years.
　In the New Medium-term Management Plan, we will evolve to the next stage, under the theme of “global transformation,” with the aim of achieving ¥20.0 billion in business profit from the Global Business. Our global transformation means that our overseas subsidiaries develop the Saison brand worldwide through the creation of synergy, not only between their own businesses but also between countries. By doing so, they learn from one another, give back to each other, and share each company’s good aspects, transcending the positions of head office and subsidiaries. I believe that this will create a foundation for the organization to continue to evolve over the long term.
　Currently, in addition to scaling up our business in India, we are focusing on getting our businesses in Brazil and Mexico, which we launched in early 2023, on track. The major difference between the businesses in these two countries and the business in India at the time of launch is plentiful human resources. The level of human resources, including the International Headquarters (IHQ) in Singapore, has risen dramatically compared to five years ago. We believe that getting involved in businesses across national borders will lead to their own development, which in turn will improve the capability of the Group as a whole.

The global macroeconomic environment is changing rapidly and becoming more uncertain every day. What are your thoughts on the changing market conditions surrounding the Global Business?

For the Global Business, market conditions cannot be summed up in a single comment, as there are risks that affect the worldwide market—like pandemics—as well as country-specific risks, such as changes in policy. For example, India has room for growth in the finance market due to its growing economy, as well as its digital infrastructure, but there is always the regulatory risk. While Brazil’s economy will continue to grow, we assume that interest rates will decline as credit securitization in the supply chain continues. While Mexico has a lot of room for growth as a destination for transferring production from China, as well as high potential in terms of financial inclusion, its digital infrastructure remains underdeveloped. Basically, our business has high potential because we are operating in markets with room for expansion to underserved populations. However, we cannot respond to these sorts of country-specific risks with a standardized strategy under the direction of the Head Office. This is where local experts play a crucial role. Although India experienced a pandemic lockdown shortly after we started business operations, growth accelerated as a result of our efforts to build systems during that time. In terms of underwriting, we were able to obtain valuable worst-case data while minimizing damage due to the fact that the business was still small in scale. It was precisely because of local personnel that we were able to respond in such a flexible manner. By infusing them with the experience and expertise that our company has previously gained in Japan from overcoming restrictions on total lending and maximum interest rates, among other challenges, I believe that we will be able to prepare for any possible shocks that might occur in the future.

Please tell us about initiatives in the India business and specific measures for the future, as well as the challenges you face.

As a result of entering the market through a partnership with a local FinTech company (B-to-B-to-C), the India business has succeeded in accumulating a wide range of knowledge and data, while also reducing risks. At the same time, we have been focusing on the B-to-C model for about two years now, as we believe that entering into direct lending to end-users (direct lending) is an inevitability in order for us to sustainably achieve major growth in earnest. This year, we are pushing to diversify our products by starting to offer secured loans, which will increase our receivable balance, improve profitability, and hedge risks. In addition, we have diversified our fundraising by borrowing from local banks and issuing Non-Convertible Debentures and CP, based on the business acquiring an AAA rating from an Indian credit rating agency. Going forward, we aim to further improve growth and asset efficiency not constrained by our own balance sheet by liquidating our receivables.
　In terms of challenges, the risk of regulation, which I mentioned earlier, is significant. However, we have a dedicated team in place, and a structure that enables them to respond swiftly and appropriately. People have a tendency to think negative thoughts when they hear about a high regulatory risk. However, we understand that in the case of India, the underlying goal is healthy market growth and consumer protection, and that regulation is, in fact, a necessary process from a medium- to long-term perspective.

What are your thoughts on the success of the human resources that drive the businesses in each region?

“How is Saison able to attract the best and brightest?” This is a question I am often asked. While there are many different perspectives, I believe that ultimately the important thing is the DNA of the organization. There are many other attractive companies in terms of creditworthiness and financial strength. However, many of our members chose to join us because they were drawn to our organization’s DNA, which has been in place since our founding, to challenge ourselves, try new things, and think on the move. Overseas, where changing jobs is commonplace, it is, of course, important to retain each and every member. Above all, though, we believe it is important to continue to attract people who share our DNA and pass it on, even if the people change. This year, for the first time, we formulated the Global Business’s own mission, vision, and values to put this DNA into words as a shared philosophy. To more effectively communicate these initiatives outside the company, we are currently focusing on branding and communication.

You also serve as the Chairperson of the Sustainability Committee. Please tell us about the recent changes in the environment surrounding sustainability, as well as Credit Saison’s specific initiatives and achievements.

Providing financial services to underserved populations—an initiative we are developing in the Global Business—is widely recognized as financial inclusion, which is also necessary to achieve the SDGs. In other words, the Global Business itself has a positive impact on society. I am responsible for the Global Business, am the Head of the Sustainability Department, and serve as the Chairperson of our Sustainability Committee. I oversee the sustainability of the entire Group and aim to enhance our corporate value by strengthening our external communication.
　As for initiatives related to the Global Business in FY2023, the Group’s first Impact Report was published in November by the Impact Team formed at Saison International. We also established the Social Impact Promotion WG within the Sustainability Committee, with one of the Impact team members also serving as the head of the WG, thereby promoting integration between the head office and overseas subsidiaries. In terms of addressing climate change, our first initiative is to measure the CO2 emissions of our Indian subsidiary for the first time, which we plan to disclose in FY2024.
　Sustainability is now one of the factors that investors consider when selecting a company, and there are an increasing number of initiatives that publicly listed companies need to take. We will continue to create social value through our business, and at the same time, we will continue to actively disseminate those efforts.

A decade of tackling challenges and advancing

Saison International
Pte. Ltd. COOKeith Wong
Keith Wong

I joined Saison International in 2018 as the second local member, when the “Saison” brand was less known. The unique, innovative culture of Credit Saison was the main motivation for me to join the company and the key reason why we succeeded in building many new businesses in a short time. Saison International is now the Group’s International Headquarters, with 30 team members of diverse backgrounds and skill sets, working together to manage a truly multinational business. The interactions and cross-pollination among different operations have led to many new business ideas, and together with the leaders and members across the global businesses, we are constantly exploring business opportunities and preparing ourselves for the challenges ahead. I am confident we will navigate the global business through the uncertainties and bring it to greater heights, and I look forward to the next 10 years and beyond!