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Category: Finance

Retail News Asia is committed to providing both local and global retailers with the latest Finance news throughout the Asian market. This on a daily base.

  • Credit Growth in Indonesia Remained Flat in September 2016′

    Credit Growth in Indonesia Remained Flat in September 2016′

    Slowing credit growth will also make it highly difficult for Indonesia’s overall macroeconomic growth to accelerate more markedly this year (the nation’s GDP is expected to expand by 5 percent this year, up from a growth pace of 4.7 percent last year). Juda Agung, Executive Director at the Economic and Monetary Policy Department of Bank Indonesia, said privately-held companies are now focusing on consolidation rather than on business expansion.

    But on the other hand, Agung added, the nation’s banks have also been more careful to disburse loans as the non-performing loan (NPL) ratio has increased. However (conflicting with Agung’s statement), in a recent Bank Indonesia survey the business community of Indonesia actually indicated that it was easier to obtain credit in Q3-2016 compared to the preceding quarter.

    Bank Indonesia expects credit growth to accelerate in the fourth quarter of the year on the back of the lower interest rate environment, the government’s successful tax amnesty program as well as the easier loan-to-value (LTV) ratio.

    The lender of last resort cut its benchmark interest rate (the 7-day Reverse Repo rate) to 5.00 percent in September 2016, while in late August 2016 it cut the LTV ratio requirement by lowering the minimum down payment that is required for first home purchases (when using credit) to 15 percent for houses sized larger than 70 m2 (from 20 percent previously). Meanwhile, the minimum DP for the purchase of a second home was lowered to 20 percent (from 30 percent previously), while that for a third home was lowered to 25 percent (from 40 percent previously).

    Nelson Tampubolon, Commissioner for Banking Supervision at Indonesia’s Financial Services Authority (OJK), informed that slowing credit growth is actually caused by slowing corporate credit. Consumer credit, on the other hand, has continued to grow, he stated.

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  • Fortis Healthcare to take loan of Rs 77.6 cr from Singapore bank

    Fortis Healthcare to take loan of Rs 77.6 cr from Singapore bank

    Fortis Healthcare said it´s Mauritius subsidiary Fortis Healthcare international Ltd, has will take a loan of SGD 165 mln (Rs 77.6 crore) from Singapore-based Consortium of Bankers.

    “Fortis Healthcare Ltd has being holding the company, is giving guarantee on behalf of FHIL securing the payment of principle and interest thereon.,” said the Indian company.

    Fortis Healthcare Limited is a chain of super speciality hospitals in India.

    Currently, the company operates its healthcare delivery services in India, Dubai, Mauritius and Sri Lanka with 54 healthcare facilities (including projects under development), approximately 10,000 potential beds and 314 diagnostic centres.

     

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  • Mastercard Appoints President for Indonesia, Malaysia and Brunei

    Mastercard Appoints President for Indonesia, Malaysia and Brunei

    Now he will also be in charge of encouraging the implementation of digital payment technology.

    Previously based in Kuala Lumpur, Khan and his division will now be headquartered in Jakarta. Mastercard considers this a move towards recognition of Southeast Asia’s developing countries, whose economy has been predicted to be worth billions of dollars.

    The move was also triggered by the formation of ASEAN Economic Community (AEC), where the ongoing economic integration gives a potential for Mastercard to gain influence.

    “AEC stands as a landmark to integrate the region’s economy. Safdar Khan’s appointment would serve as evidence of Mastercard’s focus in building a strong, relevant and influential business in Southeast Asia. This appointment shows our continuing commitment to empower the great leaders who can encourage innovations and inclusion in a meaningful and interconnected way,” Mastercard Asia Pacific co-president Ari Sarker said.

    Sarker also appreciated Khan’s profound knowledge about the customers, regulators and government bodies.

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  • Assets of sharia banks increase to Rp305.5 trillion

    Assets of sharia banks increase to Rp305.5 trillion

    The assets of sharia banks rose 18.49 percent year-on-year to Rp305.5 trillion by July, 2016 on growing third party funds.

    Third party funds held by sharia banks rose 12.54 percent to Rp243 trillion in the same period, Chairman of the Board of Commissioners of the Financial Service Authority (OJK) Muliaman Hadad said in a news release received here on Sunday.

    “The rise in third party fund resulted in an increase of 7.47 percent in sharia financing to Rp220.1 trillion from Rp204.8 trillion,” Muliaman Hadad said at a seminar on sharia financing in Washington, the United States, organized by the World Bank and the Islamic Financial Services Board.

    The rise in sharia financing contributed to increase sharia share of the banking market to 4.81 percent in July, 2016 from 4.6 percent in July 2015. The market share rose to 5.13 percent if conversion of the Aseh Development Bank to Sharia bank was taken into account.

    Muliaman said sharia finance could be an instrument to achieve Sustainable Development Goals (SDGs) as called for by the United Nations.

    “The typical principles of sharia finance which give emphasis on equitable income and is oriented to environmental social activities, make development of sharia financial system very relevant with the SDGS goals,” he said.

    Sharia finance covers not only poverty aspect but also health care, education, gender equal treatment, infrastructure development, economic development, anticipation of climate change, etc, he said.

    He said sharia banking industry has grown in Indonesia as indicated by the decline in Non-Performing Financing (NPF) ratio to 4.81 percent by July 2016.

    Return on Assets (ROA) rose to 1.06 percent by July, 2016 from 0.91 percent by July 2015. As for the ratio of operating cost to operating income has improved to 92.78 percent from 94.19 percent.

    In addition, there was an increase in capital adequacy of sharia banks as reflected in the Capital Adequacy Ratio (CAR) to 14.86 percent in July 2016 from 14.47 percent last year.

    The assets of sharia non bank finance industry rose 23.18 percent to Rp80.1 trillion by July 2016.

    Global sharia bonds contributed 23.3 percent or US$10.15 billion to the total value of international sovereign bonds.

    Indonesia is the first country to issue sharia retail bonds.

    Muliaman said sharia capital market could also play a significant role in financing the governments infrastructure projects.

    Separately a member of the OJK board of commissioner Firdaus Djaelani said in Semarang, the country had sharia banks, 22 conventional banks having sharia units and 165 sharia people financing banks.

    Firdaus said based on data in September, 2016, there were 36 investment managers issuing sharia mutual fund (Reksadana), 12 securities companies issuing sharia on line trading system, 326 issuers and public companies with sharia shares and 51 series of corporate sharia bonds and 53 series of state sharia bonds have been issued.

    Assets in sharia products in the stock exchange were valued at Rp3,272.84 trillion consisting of market capitalization of sharia shares, sharia mutual funds and corporate sharia bonds.

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  • IDX Suspends Bumi Citra Permai

    IDX Suspends Bumi Citra Permai

    The Indonesia Stock Exchange (IDX) has suspended the Bumi Citra Permai (BCIP) from trading because of significant, cumulative stock price declines.

    BCIP opened at Rp478 per share before plunging 46 bps (9.62%) to Rp432.

    “With regards to BCIP’s significant, cumulative price drops, the IDX deems it necessary to suspend the stock from being traded,” IDX head for transaction supervision Irvan Susandy said in an exposure on Friday, October 7.

    BCIP is not only suspended from trading in the regular market but also in the secondary market, starting today, October 7. The suspension is aimed at giving investors enough time to make thoughtful considerations in deciding what to do with their BCIP stocks.

    BCIP is an issuer engaged in the field of real estate, construction, trading, mining, services, transportation, publishing, and agriculture. The company’s main businesses are real-estate and water management, operated by subsidiary Milwater Pratama Mandiri.

    BCIP also has two real estate subsidiaries Millenium Power and Citra Permai Pesona.

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  • Susi Promises Banking Access for Fishermen

    Susi Promises Banking Access for Fishermen

    Marine and Fisheries Affairs Minister Susi Pudjiastuti will facilitate fishermen or ship owners who owns ships with a capacity of less than 10 gross tonnage to have access to banking services. Minister Susi said that ship owners would only need came to the Marine and Fisheries Affairs Ministry office.

    “I will establish an outpost at the Ministry’s licensing office. We will meet [fishermen] with banking institutions,” Susi said on Wednesday, October 5, 2016.

    Susi promised to help fishermen to be able to access credit facilities to get funds to replace their trawls. Susi targeted fishermen to be able to get at least Rp 200 million loan. The Minister also offered to provide a debt restructuring program for fishermen.

    Susi hoped that ship owners will take the opportunity to replace their trawls and fish with more environmentally friendly method. The Minister added that she had recently managed to help a fisherman to get a fresh loan from the bank.

    Susi said that she had contacted two state-owned banks, Bank Rakyat Indonesia, and Bank BNI, to help with the program. The Minister also expected other banks to take part in the program, which is supported by the Financial Services Authority.

    In addition, the Marine and Fisheries Affairs Ministry had asked fishermen to re-measure their ships, while Minister Susi guaranteed that there will be no illegal levy in the process.

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  • Vedder Price expands into Singapore

    Vedder Price expands into Singapore

    Vedder Price announced the opening of a new office in Singapore, continuing the growth of the firm’s global footprint. The Singapore office will initially tap existing members of Vedder Price’s prominent Global Transportation Finance (GTF) practice, with plans to further develop this new office through additional lateral hires. The office will practice U.S. and UK law.

    The Singapore location gives Vedder Price a foothold in a key region that is critical to the firm’s clients and where the firm’s GTF practice is already thriving. The Asian global transportation finance market is expected to undergo explosive growth in the next 20 years, particularly in aircraft finance, as the region’s population grows and air travel surges. Growth in maritime finance is also expected.

    Vedder Price enjoys a strong worldwide reputation for legal services related to global transportation finance. The firm serves a broad base of clients across all transportation sectors, including the aviation, aerospace, railroad and marine industries, and serves both U.S.-based and international clients who execute deals worldwide under U.S. and UK law. The firm was named the “Law Firm of the Year” at the 2015 Aviation 100 Awards and recognized for “Overall Deal of the Year.

    “This is an exciting time for our firm and practice as we expand our capabilities into Asia,” said Dean N. Gerber, Vedder Price Board of Directors member, Executive Committee Vice Chair and Chair of the firm’s Global Transportation Finance team. “Singapore continues to be a key focal point for global transportation finance and leasing, and we expect this to continue for years to come given market conditions. We look forward to establishing new relationships and to strengthening our ability to serve our many clients already doing business or domiciled in Asia.”

    The office will be established by Shareholder Ji Woon Kim who recently relocated from the firm’s New York office. Mr. Kim will manage the business development and strategic growth of the office, including lateral hires. Mr. Kim, who has spent his entire career at Vedder Price, has helped build the GTF practice for more than a decade. In 2013, he was recognized as a Rising Star by Airfinance Journal, and in 2014, he was listed as a Rising Star by New York Super Lawyers in the practice of aviation and aerospace. He will be joined by solicitor Lev Gantly who relocates from the firm’s London office.

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  • New Silkroutes Group in Joint Venture to Offer Private Equity Funds in Asia Pacific

    New Silkroutes Group in Joint Venture to Offer Private Equity Funds in Asia Pacific

    New Silkroutes Group (“NSG” or “the Group”) has formed a joint venture with three parties, including the Singapore subsidiary of China’s Nanshan Group, to develop private equity funds that will focus on healthcare and infrastructure in the Asia Pacific region, including Japan and Australia.

    The new Singapore-incorporated entity, New Silkroutes Asset Management, is 30% owned by NSG’s subsidiary New Silkroutes Capital Pte Ltd, 30% by Nanshan Group Singapore, 30% by former United Overseas Bank (“UOB”) executive Terence Ong Sea Eng, and 10% by Fuji Capital Pte Ltd.

    New Silkroutes Asset Management, which is applying for the Capital Markets Services licence from the Monetary Authority of Singapore, will initially focus on the healthcare sector in the region.

    The number of people in the middle class in Asia Pacific is expected to rise to 3.2 billion by 2030 from 525 million in 2009, according to the Organisation for Economic Cooperation and Development. This increase, together with growing affluence, is expected to drive demand for better quality medical treatment and care.

    Healthcare is an area NSG recently said it would expand into. The Group announced last month it would acquire a 51% stake in Singapore-based Healthsciences International Pte Ltd (“HSI”) for S$2.17 million. HSI’s management team has experience in developing and managing hospitals and ancillary healthcare services. It also offers primary and preventive care through its three complementary integrative healthcare clinics, and runs employee healthcare benefits programmes in Southeast Asia.

    Mr Ong will head New Silkroutes Asset Management. The veteran banker retired recently from UOB after a 34-year career, during which he ran several of the lender’s key divisions. His last position at the bank was Head of Group Global Markets and Investment Management, where he drove UOB’s global treasury and asset management businesses.

    He was also Chairman of UOB Asset Management and UOB Venture Management, and a member of several of the bank’s key committees, including its management executive committee and investment committee.

    Mr Ong was previously Deputy Chairman of the board of Simex, a futures exchange that merged with the Stock Exchange of Singapore to form the Singapore Exchange. In 2010, he was conferred the Distinguished Financial Industry Certified Professional title by the Institute of Banking and Finance Singapore. In September this year, he received the Lifetime Achievement Award from Futures & Options World, a leading news and data service for the international futures and options industry.

    “The stakeholders in this joint venture have deep expertise in their respective fields. With this collaboration, I am confident we can offer investors an attractive alternative to generate a consistent stream of income,” said Mr Ong, who was instrumental in bringing Nanshan Group Singapore into New Silkroutes Asset Management.

    “Leveraging on the networks and expertise of New Silkroutes Asset Management’s stakeholders, we will be able to source promising healthcare services companies in Asia Pacific and add value to the companies we invest in,” he added.

    Nanshan Group is a privately-held company ranked among the top 500 enterprises in China. It started with an aluminium business, which subsequently listed in Shanghai, and evolved into a conglomerate with interests in textile, finance, healthcare, real estate, tourism, education and aviation.

    Within the healthcare space, Nanshan Group has invested in and built hospitals, nursing homes and related facilities in China. In Singapore, its main focus is real estate development and aluminium trading. It acquired several industrial buildings and hotels and launched its maiden condominium project in Singapore in recent years.

    Singapore-incorporated Fuji Capital provides strategic advisory and fundraising services to companies. Its major stakeholders have investments in the financial services sector in North America. These investments include licensed entities operating in gateway cities across the US.

    “As an associate company of NSG, the new joint venture will complement our wholly owned investment management arm, New Silkroutes Capital, which is also exploring investment opportunities in healthcare, among other sectors,” said Dr Goh Jin Hian, Group CEO at NSG. “Healthcare will be another engine of growth for NSG as we believe this is an area with huge potential in Asia Pacific.”

    Based in Singapore, New Silkroutes Capital offers investment management and strategic advisory services to institutions, enterprises and high-net-worth individuals looking for professionally managed investment products. It has a joint venture in New York that can develop structured products and private-label funds.

    NSG exited the SGX Watchlist in November 2014 and is morphing into an investment holding company with businesses in investment management, energy and resources, healthcare, and infocomm technology. The Group currently gets most of its revenue from oil and gas trading.

  • More companies delaying payments, says Singapore Commercial Credit Bureau

    More companies delaying payments, says Singapore Commercial Credit Bureau

    Fewer Singapore companies are paying their bills on time, according to data released on Monday by Dun & Bradstreet Singapore’s (D&B Singapore) Singapore Commercial Credit Bureau.

    Prompt payments fell 8.9 percentage points from 51.1% in 3Q15 to 42.2% in 3Q16. At the same time, slow payments increased by 8.1 percentage points to 46.4% from 38.3% a year ago.

    Compared with the previous quarter, prompt payments fell by 3.8 percentage points to 42.2%, and slow payments rose by 3.8 percentage points to 46.4%.

    Partial payments increased by 0.8 percentage points to 11.5% from a year ago but fell by 0.03 percentage points over 2Q16.

    The data was compiled from over 1.6 million payment transactions of Singapore firms operating through the bureau.

    Prompt payment is defined as having 90% or more of total bills paid within the agreed payment terms while slow payment is defined as having more than 50% of total bills paid later than 30 days beyond the agreed credit terms.

    Delays in payment increased across all industries — construction, wholesale trade, services, manufacturing, and retail — during the quarter.

    However, the biggest proportion of slow payments came from the construction sector, where payment delays increased by 10.8 percentage points from a year ago and by 4.2 percentage points from a month ago to 50.8%.

    On a quarterly basis, special trade contractors had the greatest increase in slow payments of 5.9 percentage points to 48.8%, while the heavy construction sector had the highest proportion of slow payments of 52.7%. Delayed payments also increased in the building constructor sector by 4 percentage points to 52%.

    The wholesale trade sector had some of the greatest increases in payment delays due to the declines in local and foreign wholesale trade. Slow payments increased 4 percentage points over the quarter and 8.3 percentage points over the month to 41.2%.

    In particular, slow payments by wholesalers of durable goods jumped by 4.5 percentage points q-o-q to 41.4%, while that of wholesalers of non-durable goods rose by 2.5 percentage points q-o-q to 40.4%. per cent in Q3 2016.

    Retail had the second highest proportion of slow payments, but registered the smallest q-o-q increase during the current quarter, after a large spike in 2Q16. Delayed payments rose 2.9 percentage points q-o-q and 6.8 percentage points y-o-y to 49.4%.

    Retailers of building materials and garden supplies had the highest increase in slow payments from 53.1% in 2Q16 to 61.2% in 3Q16, followed by retailers of general merchandise, with a 6.8 percentage point increase and automobile retailers with a 6.3 percentage point increase.

    Audrey Chia, D&B Singapore’s Chief Executive Officer, noted that the weaker performance in payment was a “clear indication that firms here are feeling the impact of a credit crunch”.

    To provide some relief to cashflow problems, Chia added that firms should seek alternative measures including rigorous credit checks on customers and the diversification of funding through non-traditional financing institutions.

  • Jakarta tax amnesty has little impact on banks here

    Jakarta tax amnesty has little impact on banks here

    The tax amnesty scheme in Indonesia has had a much smaller impact on funds flowing out of Singapore’s private banking industry than feared, an RHB report suggested on Tuesday.

    The funds flowing out of Singapore likely made up only 1-2 per cent of assets under management (AUM) of the private banking industry. Some 79 trillion rupiah (S$8.3 billion) was repatriated in the first nine-month phase of Jakarta’s tax amnesty programme.

    The scheme allows Indonesians to declare assets that were previously undeclared to tax authorities. In return, they paid a sharply reduced tax rate on those assets – just 2 per cent – in the first phase, which ended on Sept 30.

    The 79 trillion rupiah was 12 per cent of the assets of wealthy Indonesian clients that were declared to be kept in Singapore, according to data from the Indonesian government. Singapore has been a big draw for rich Indonesians. All in, the assets held here and declared to the Indonesian authorities made up 70 per cent of all overseas funds that had been declared.

    RHB calculated that the total assets of the three Singapore banks’ private banking segment stood at about S$321 billion. This means the amount repatriated to Indonesia from Singapore accounts for only 2.6 per cent of the three banks’ total AUM. These already exclude the asset base of the top private banks in Singapore, such as UBS, Citi, and Credit Suisse. So, all in, the impact on Singapore’s private banking industry should be about 1-2 per cent of all assets held here, RHB noted.

    “There is likely to be more repatriation of funds from Singapore to Indonesia going forward, but the experience of Phase 1 suggests that the amount repatriated is unlikely to be a large percentage of Singapore banks’ assets under management,” it said.

    This comes as the tax rate for those who repatriate their assets in Phase 2 rises to 3 per cent, one percentage point more than in Phase 1. The tax rate will be increased yet again in the third phase, Jakarta has said.

    Indonesian taxpayers had declared more than 3,600 trillion rupiahs in assets both domestically and overseas. An Indonesian tax authority quoted by The Straits Times said the country had set a 4,000 trillion rupiah target for the first phase.

    The tax amnesty scheme comes amid heightened scrutiny of tax evasion. Banks here had to file a suspicious transaction report on clients taking part in the programme, with the Singapore authorities later having to state publicly that participation in a tax amnesty scheme alone would not attract criminal investigation in Singapore. The Monetary Authority of Singapore (MAS) said that the use of suspicious transaction reports is a practice across other jurisdictions when handling tax amnesty cases.

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  • BI to Introduce Coin Deposit Machine

    BI to Introduce Coin Deposit Machine

    Deputy Director of the BI Financial Management Department Asral Mashuri in Jakarta, Tuesday 4, 2016, said that Bank Indonesia (BI) is planning on implementing a coin deposit machine to ease people in saving the form of money.

    “The machine would look like an ATM, but this one is for coins, and the machine can sort out the money; which is one thousand and one hundred. It would be easy for people to use,”  he said.

    According to Asral, nowadays, many people keep the coins and left it uncirculated. The uncirculated coins have forced BI to reprint it, although coins have a longer lifespan than paper money.

    A coin deposit machine is hoped to help banking institutions in retracting the coins. “This also accelerates the money circulation, and later on, banking institutions can retrieve money from people’s savings,” Asral said.

    He added that it will be implemented as soon as possible. The study is still ongoing; it will be realized but not in the coming months. “The machine will be available for the public to use soon as possible,” Asral said.

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  • Mandiri prepares syndicated loans of Rp4 trillion

    Mandiri prepares syndicated loans of Rp4 trillion

    State lender Bank Mandiri is preparing a syndicated loan of Rp4 trillion to build five airports in Indonesia in the fourth quarter of 2016, the banks corporate banking director, Royke Tumilaar, said.

    Bank Mandiri will lead the syndication of loans to state airport operator PT Angkasapura I which will develop the five airports, Royke stated here on Monday.

    “Syndicated loans worth Rp4 trillion will be extended for the purpose. The Kulonprogo airport in Yogyakarta will be among these five airports,” he added.

    The loans will be used to build new airports and expand the existing ones. The five airports include Ahmad Yani in Semarang, Syamsudin Noor in Banjarmasin and Kulonprogo in Yogyakarta. Also, the Terminal 3 at the Juanda Airport in Surabaya and Sultan Hasanuddin Airport in Makassar are to be developed with these loans.

    Other debtors that will be involved include Sarana Multi Infrastruktur (SMI), PT Bank Central Asia Tbk (BCA), PT Indonesia Infrastructure Finance (IIF) and PT Bank Rakyat Indonesia Tbk (BRI).

    Royke further syndicated loans will also be given in the fourth quarter of 2016 for the construction of toll roads in and around Jakarta.

    “We hope the process can be started in the fourth quarter of 2016, the construction of a new airport in Kulonprogo also begins by then,” he noted.

    Overall, the demand for loans to finance infrastructure development in the second semester of 2016 continued to increase, he noted.

    The state bank has also prepared loans worth Rs 20 trillion for the construction of power plants in the fourth quarter, he disclosed.

    As per the bank’s target, the credit extended to infrastructure development will grow 20 percent year on year by the end of this year.

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  • Sharia Finance Sees Promising Future

    Sharia Finance Sees Promising Future

    The Financial Services Authority (OJK) says that the sharia finance still sees promising future despite the slowing down of global economic growth.

    “I’m optimistic on the promising future of the sharia finance industry. However, there will be many challenges and uncertainty,” said Sarjito, OJK Deputy Commissioner for Capital Market Supervision, Thursday, September 29, 2016.

    The challenges and uncertainty include the difficulty in expanding the business in a different jurisdiction that gets hit by local regulations and also the interpretation of sharia itself.

    Sarjito continued, the other challenge is the weak of the sharia finance management and its governance. “The last one is the lack of human resources that are competent enough and having the adequate capacity in sharia finance,” he said.

    The sharia finance industry in Indonesia has shown an unbelievable progress. Based on the report of the Indonesian Islamic Finance, the asset of the sharia finance industry has a 10% growth, and reached Rp617 billion in 2015.

    The number has exceeded the conventional finance asset’s growth. The same trend is also seen in other countries that are also developing the sharia finance.

  • Rupiah weakens 43 points against USD

    Rupiah weakens 43 points against USD

    The rupiah weakened 43 points to close at 13,015 per US dollar in the Jakarta interbank spot market on Friday evening, compared with the previous close of 12,972.

    “The rupiahs exchange rate depreciated against the US dollar along with the weakening of exchange rates in Asia,” economist Rangga Cipta of Samuel Sekuritas said.

    He said sentiment towards the upward revision of the US second-quarter gross domestic product growth was one of the factors causing the dollar to appreciate against several global currencies.

    Data for US inflation rate, which is projected to increase, has boosted the dollar to move into the positive zone, Rangga explained.

    After all, the relatively stable and rising crude prices and domestic optimism about the tax amnesty program has prevented the rupiah from falling further, he added.

    “The condition will make the rupiah depreciate against the dollar only in a short term,” he said.

    Money market expert Rully Nova of Bank Woori Saudara Indonesia Tbk said the rupiahs depreciation is relatively limited following the market expectation of a low inflation rate in September this year.

    “It is expected the data for inflation rate will be released early next week (Monday),” he said.

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  • Ericsson, HomeSend team for remittance in emerging markets

    Ericsson, HomeSend team for remittance in emerging markets

    HomeSend and Ericsson have teamed up to accelerate the adoption of international remittances via mobile across emerging markets.

    With the partnership, 50 million Ericsson-powered mobile wallet users are expected to benefit from access to international payment services via HomeSend’s network of money transfer operators (MTOs).

    The Ericsson Wallet Platform is now certified by HomeSend, a joint venture between Mastercard, eServGlobal and BICS that aims to bridge the gap between financial institutions, non-financial entities and mobile network operators.

    The HomeSend-Ericsson partnership aims to give financial service providers a low-cost, simple and fast way to connect the HomeSend global money transfer hub with Ericsson’s mobile money offering around the world. With this, mobile money users are expected to be able to enjoy new levels of flexibility, choice and value.

    Ericsson’s Mobile Financial Services solutions now also include Ericsson interconnect, the company’s cloud-based financial transactions switching and mediation service, which aims to extend reach to Financial Services providers using any wallet or mobile banking platform.

    “The partnership represents HomeSend’s continuing commitment to displace cash and facilitate electronic payments, advancing financial inclusion in the new global economy,” said Stephen Doyle, CEO, HomeSend. “Millions of new unbanked consumers will gain improved access to digital inflows from friends and relatives, as we continue to advance toward a fully open ecosystem for global mobile money remittances.”

    In 2016, the World Bank expects remittances to reach over $600 billion, with more than $440 billion being sent to developing countries. The partnership aims to bridge the gap between finance and telecommunication service providers, enabling mobile wallet users to send and receive money from their family abroad through their mobile phones, while enabling financial institutions to offer their customers the convenience of digital money transfers regardless of their location or that of the recipient.

    “By enabling fast, secure integrations to HomeSend’s remittance hub, we are providing growth opportunities for our customers,” said Peter Heuman, head of Ericsson Mobile Financial Services.

    “Integration with the HomeSend Hub connects Ericsson mobile wallet powered financial service providers, and potentially other financial service providers, to a global network of financial institutions and MTOs. This represents a major advance in helping to grow mobile financial services ecosystems whilst supporting financial inclusion.”

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