Mizuho Bank, Japan’s third largest bank by assets has invested Rs 1200 crore for a 15% stake in Bangalore based non-banking finance company (NBFC) Credit Saison as it seeks to diversify into lending to small enterprises and consumer finance in India even as it expands its large corporate book.
Yasuhiro Kubota, co CEO Asia Pacific at Mizuho Bank said the investment is part of the Japanese lender’s strategy to delve deeper into what is its fastest growth market. It comes months after the bank had invested Rs 4100 crore of capital into its Indian branches.
“One thing is building the organic capabilities and building a product capability piece by piece. The other is the inorganic opportunities because we believe that the Indian market is even bigger. The Indian start up ecosystem is a third largest after the US and China and we want to be able to connect with Indian startups who are global customers, not just Japanese customers, but all over the world,” Kubota said.
Credit Saison India is a subsidiary of Japan’s third largest credit card company and lends to consumers and small and mid-size enterprises (SME) in India. It started its Indian operations in 2019 and has been profitable since fiscal ended March 2020.
Mizuho already has investments in three venture funds which has given the bank equity exposure to the start up ecosystem and with the equity stake in Credit Saison it gives the bank an experience of debt investments in India, Kubota said.
The investment will give Mizuho one board seat in the company in India and Mizuho can also add one director in the company. Last January credit rating agency Care affirmed AAA rating on Credit Saison’s India operations largely due to the company’s parentage, strong capital support and integrated risk management policies.
The company made a net profit of Rs 1,545 crore in the first half of fiscal 2023.
