Indonesian online lender Kredivo said it is expanding its “buy now, pay later” service to Vietnam, about three weeks after its parent, Singapore-based fintech company FinAccel, announced plans to go public on Nasdaq via a SPAC deal that could value the company at $2.5 billion.
Kredivo and Vietnam-based family office Phoenix Holding will form a joint venture called Kredivo Vietnam Joint Stock Company, according to an announcement by FinAccel.
“Vietnam came as a logical choice given the low penetration of credit cards in the country and a rapidly growing middle class; the fast-growing e-commerce market, and the similarities in the demographic and consumption patterns to Indonesia,” FinAccel Chief Operating Officer Valery Crottaz said in the statement.
JPMorgan, in its 2020 E-commerce Payments Trends Report, said Vietnam’s credit card penetration was 0.11 per capita, on par with Indonesia’s 0.07 cards per capita. While the e-commerce market in Vietnam was valued at only 209 trillion Vietnamese dong ($9 billion) in 2019, the investment bank anticipated strong annual double-digit growth supported by an upcoming generation of digital natives starting to earn and spend money – 37.9% of the population is 24 years old or younger. Likewise, the BNPL industry in Vietnam is also on the rise. Dublin-based Research and Markets expected the BNPL payment in Vietnam to grow by 137.3% this year to $491.3 million from 2020.
The story of growth has attracted competition as well. According Viet Nam News, there are 16 finance companies licensed by the State Bank of Vietnam and three players – FE Credit, HD Saison and Czech BNPL firm Home Credit – account for 80% of the market. FE Credit is owned by Vietnam Prosperity Bank, while HD Saison is a joint venture between Ho Chi Minh City Development Bank and Japan’s Credit Saison. Indonesian unicorn Traveloka is also said to be planning to introduce its BNPL service to Vietnam and Thailand.
Phoenix Holding also invests in fintech companies in Vietnam such as in digital bank Timo and P2P lending platform Interloan. FinAccel says Kredivo’s core products will be launched in stages, starting with bill payments for daily needs and personal loans, followed by e-commerce BNPL in the fourth quarter of this year.
Kredivo claims to be the largest and fastest-growing BNPL platform in Indonesia, with nearly four million approved customers and partnerships across eight of the top 10 e-commerce merchants in the country. In a recent media interview, CEO Akshay Garg said the company expects to cross $100 million of revenue this year.
In addition, FinAccel seems to be planning to expand its service to digital banking. In late May, the company acquired a 24% stake shares in small Indonesian lender Bank Bisnis Internasional worth 551 billion rupiah ($38 million). The bank’s share price has increased by seven times since FinAccel’s stake purchase.
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