“Banking on Laos”
Japanese group set to revolutionize Asean banking industry.
MARUHAN Japan Bank Lao Co., Ltd. (MJBL) is a licensed commercial bank established in 2013 in Lao PDR. MJBL, its sister bank in Cambodia and its Yangon representative office in Myanmar operate as part of its Singapore-based regional financial institution, MARUHAN Investment Asia Pte. Ltd., which is, in turn, part of MARUHAN Japan Group. MJBL aims to use the MARUHAN Japan Group’s unparalleled resources, capacity, and expertise to revolutionize the ASEAN banking industry. It uses a mixture of innovation and experience to deliver a whole new banking experience to its customers.
The bank sees itself as an expert in relationship banking and focuses on providing its customers with unparalleled standards of service, performance and global reach. Its comprehensive range of professional, affordable, convenient and easy-to-use banking services are delivered with the kind of personal hospitality that the Japanese are renowned for throughout the world.
For a young bank like MJBL, understanding people’s behaviour and their culture are crucial to building the right business model. In an emerging market like Lao PDR, with a government that is still focused on providing basic necessity and developing infrastructure, MJBL supports and participates in all of the government’s initiatives. One such initiative is the SME Promotion Fund decreed by Prime Minister Thongloun Sisoulith on 4 September 2019 to inject capital into small and medium-sized businesses. The fund has a duty to mobilize funds from various sources to provide low interest loans for small and medium-sized enterprises (SME) and thereby contribute to Lao economic growth. The decree states that the release of SME funding must be done through commercial banks or financial institutions. MJBL is one of the appointed panel commercial bank for distributing the fund.
Digital disruption can be seen in many industries. One of the industries that have been impacted the most is banking and finance, and it has resulted in a fundamental shift in the business model. Identifying this, MJBL has adopted a hybrid business model which is more commercially viable. Apart from a physical setup, MJBL has also embarked on a Digital Service Unit, a fully paperless banking experience with human interaction. This was officially launched at the end of March 2020, and at the time, this service was the first of its kind in Lao PDR. MJBL’s official retail mobile banking and wallet app is called MJ Saduak which allows businesses to perform online banking transaction without walking into its bank branches.
Another product that is the first of its kind in Lao PDR is the SME QR Term Loan offered by MJBL to its QR merchant account holders. The SME QR Term Loan is collateral-free and flexible in repayment tenure. Almost anyone can apply for the loan as long as they register as MJBL’s QR merchant. This could possibly be the most innovative product offered to support SMEs in the country, especially in high human traffic sectors, i.e. education, tourism and transportation.
MJBL also maintains a sound risk management and governance framework, to ensure strict compliance with local laws and regulations. This framework has gained undivided support from its shareholders.
MJBL aims to grow exponentially within the next three years. It plans to grow digitally and via agency banking. MJBL’s digital banking platform will target young entrepreneurs and tech-savvy individuals. Agency banking is an alternative channel which MJBL will employ to focus on suburban or rural areas in Lao PDR. MJBL is confident of remaining competitive in the market despite the increase in direct cost distribution.
“An Asian-centric banking body helping a young country to build its economic infrastructure has all the makings of a great ACES story. Coupled with its revolutionary product offerings, and a range of services made for the markets it serves, there is no doubt that MJBL will soon be heard more and more of”.
Shanggari Balakrishnan, Chief Executive Officer, MORS Group