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Finance

Japan's umbrella credit union extends reach into Singapore

Shinkin Central Bank follows borrowers' shift to Southeast Asia from China

Singapore's central business district: Shinkin Central Bank plans to build contacts among financial institutions to find new investment opportunities.   © Reuters

TOKYO -- Japan's Shinkin Central Bank, a small-business lender with 43 trillion yen ($412 billion) in assets under management, will follow borrower companies into Southeast Asia with a foothold in Singapore.

The bank, which serves as an umbrella organization for Japan's 254 shinkin credit unions, has formed a team in Japan to prepare to establish a local subsidiary in Singapore during the summer.

This planned unit in the Southeast Asian financial hub will become the company's first overseas subsidiary involved in lending.

As high economic growth and lower costs draw small businesses to Southeast Asia from China, Shinkin Central Bank looks to provide support for borrowers as well as find financing opportunities of its own.

The lender will provide not only access to capital, but also help with expansion, such as setting up local sales channels.

The bank plans to build a network of contacts with local investment companies and financial institutions, with an eye toward involvement in project finance, syndicated loans and real estate funds.

Shinkin Central Bank uses deposits and capital raised by credit unions to invest in financial products and lend to businesses. With low interest rates in Japan making it difficult to turn a profit on domestic loans, the lender hopes to put its capital to better use in Southeast Asia.

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