Mizuho FG to Enter India's Retail Market: A Detailed Analysis and Commentary

1. Overview

Mizuho Financial Group (FG) is set to enter the Indian retail market. It will invest 120 billion Indian rupees (approximately 21 billion yen) in Kisetsu Saison Finance India, a Japanese fintech startup that provides digital lending services. According to sources, the deal is currently in the final stages of negotiation with local authorities.

2. Objectives

Mizuho FG aims to capitalize on India's growing economic potential and strengthen its Asian business presence by entering the retail market. The investment in Kisetsu Saison Finance India will serve as a springboard for the group's digital lending strategy in Asia, targeting a broad "mass" market of individuals and small businesses.

3. Background

With India surpassing China as the world's most populous country, major banks have been actively expanding their operations there in anticipation of future economic growth. However, due to the impact of repeated system failures, Mizuho FG had been lagging behind in its Asian retail strategy, including in India.

4. Kisetsu Saison Finance India

Kisetsu Saison Finance India is a wholly-owned subsidiary of Credit Saison. It specializes in digital lending to individuals and small businesses and operates a network of approximately 40 branches. Established in 2018, the company achieved single-year profitability in FY2020 and has since experienced rapid growth in its balance sheet and earnings through partnerships with local platforms. In FY2022, it recorded net revenue of 10 billion yen and net profit of 1.3 billion yen, representing 4.5 times and 2.8 times the previous year's results, respectively.

5. Future Outlook

Through the investment in Kisetsu Saison Finance India, Mizuho FG intends to develop its digital lending business in the Indian retail market. The group is also considering an eventual IPO of Kisetsu Saison Finance India.

6. Commentary

Mizuho FG's entry into the Indian market could mark a significant turning point in its overseas business strategy. Digital lending is a segment with high growth potential in India, and Mizuho FG is expected to enhance its competitiveness in this market through collaboration with Kisetsu Saison Finance India.

7. Additional Information

• India's retail market is considered one of the fastest-growing markets in the world.

• The Indian government is promoting the development of the digital economy, and digital lending is a key policy area.

• Smartphone penetration in India has been rapidly increasing in recent years and is expected to continue to grow.

• Digital lending offers greater convenience and lower fees than traditional lending methods, making it an attractive financial service for Indian consumers.

8. Disclaimer

• This analysis is based on publicly available information and does not guarantee the accuracy or completeness of the information.

• This analysis does not constitute investment advice. Please make your own investment decisions based on your own judgment.