Japan-based bank MUFG made a $200m investment in Akulaku

Japan-based bank holding and financial services firm Mitsubish UFJ Financial Group (MUFG), recently decided to invest $200 million into an Indonesian firm, Akulaku. Akulaku acts as a banking and digital finance platform, and it is the business name of a company known as Silvrr Technology Co. Ltd.

According to MUFG, its investment is meant to increase its customer base in Southeast Asia. As for Akulaku, this investment is a welcome addition to another $100 million that it received earlier this year from a Thailand-based Siam Commercial Bank PLC.

Akulaku to bring financial services to underbanked areas

Akulaku noted that the new cash injection would be a great help in the company’s mission of providing banking services to the region’s underserved markets. The region has been significantly underbanked, limiting the people’s financial opportunities. Now, Akulaku aims to boost the banking presence and change that.

The fintech firm noted that its future growth plans are aligned with those of MUFG. As such, the companies will see a joint expansion into these new markets and territories, offering new products and more. According to their plans, the expansion will accelerate in 2023.

Akulaku also revealed that the investment also came with an agreement to work together with MUFG, as well as its companies that operate in Southeast Asia. The collaborations will involve things like financing, technology, product development, distribution, and alike. The fintech firm said that both partners would enjoy shared knowledge and skills, especially with Akulaku’s strong tech capabilities in certain areas, such as risk management, credit, mobile banking, and customer acquisition. With that in mind, the company has a lot to bring to this partnership and help it thrive.

MUFG intends to focus on banking the unbanked

Meanwhile, MUFG Bank’s Chief Executive of the Global Commercial Banking Business Unit and Managing Executive Officer, Kenichi Yamato, also commented on the partnership. He said that Southeast Asia is MUFG’s second home market and a key area that offers plenty of new opportunities.

The bank’s investment in Akulaku will allow MUFG to cement its commitment to the region, which is seeing significant growth in financial needs. The customers, which are unbanked or underbanked, are more than willing to use banking services, provided that they are offered any.

Historically, the banks would avoid areas that they did not deem profitable, thus leaving entire regions of the world underbanked.

Earlier this year, in February, MUFG decided to shut down a blockchain-based online payments venture, the Global Open Network Japan. It previously developed it alongside Akamai Technologies. However, it decided to shut it down due to tough conditions in the payments industry. Originally, MUFG came up with the idea of developing a blockchain payment network three years ago, in 2019.

It is unknown whether the bank will ever give blockchain technology a second try, but given the state of the crypto market in 2022, it is understandable that the firm decided to cut its losses for the time being and stick to what it knows best.