Spire COO Jeffrey Bahar sheds light on MUFGs ongoing expansion, particularly in consumer and SME financing.

Japanese financial conglomerate, Mitsubishi UFJ Financial Group (MUFG), has significantly ramped up investments in Indonesia, as part of its strategic expansion in Southeast Asia. With recent deals and a strong interest in Indonesia’s growth potential, MUFG aims to establish a robust presence in the country.

The appeal of Southeast Asia lies in the region’s strong economies, coupled with historical ties and geographical proximity to Japan, which faces demographic challenges due to an ageing population. Indonesia, in particular, stands out as a key investment destination, boasting the largest GDP in Southeast Asia. 

MUFG’s interest in the archipelago nation is evident from the rise in its share of ownership from 40% in 2017 to 92.47% in 2022 in Bank Danamon. Other notable investments include a 200-million-euro acquisition in Home Credit Indonesia and a $200 million infusion into an Indonesian fintech firm. The Japanese firm also launched a $100 million investment fund for startups. 

Jeffrey Bahar, Chief Operating Officer of Spire, underscores Indonesia’s attractiveness as a prime investment hub due to its positive financial outlook. He predicts that MUFG will persist in its acquisitions and expansions, primarily targeting consumer and SME financing. This focus stems from recognizing the gap in its consumer financing portfolio, which lacks dedicated financial institutions for areas like furniture and electrical financing. 

MUFG’s upcoming acquisition of retail portfolios, encompassing housing, unsecured, and auto loans from Standard Chartered Bank, further bolsters its consumer-oriented efforts. Set for completion in the fourth quarter of 2023, this move underscores MUFG’s strategy to empower its consumer businesses as the main growth driver.

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Marie Teo
Manager, Group Corporate Communications
Spire Research and Consulting
Phone: (65) 6838 5355
E-mail: marie.teo@spireresearch.com