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| Financial Services Commission (FSC) Vice Chairman Kim So-young speaks during a meeting in downtown Seoul, Wednesday, on facilitating the entry of domestic credit finance companies into the global market. Courtesy of FSC |
By Lee Yeon-woo
Southeast Asia has been a lucrative market for Korean financial firms for some time. However, as this market approaches saturation, officials suggest that Central Asia could be the next land of opportunity.
The Financial Services Commission (FSC) held a meeting, Wednesday, to discuss support plans for facilitating the entry of domestic credit finance companies into the global market. Credit finance companies include credit card firms, leasing and installment financing companies and venture capital firms.
"Digitalization not only enables digital payments in countries with insufficient financial infrastructure but also broadens the scope of financing options," FSC Vice Chairman Kim So-young said during the meeting in Seoul attended by financial experts and officials from these firms.
"Last month, during my visit to Kyrgyzstan, I witnessed the potential for our credit finance companies to globalize (in this sector)."
In May, Kim visited two Central Asian countries ― Uzbekistan and Kyrgyzstan ― and participated in several events. These included a launching ceremony for BNK Finance in Kyrgyzstan and a business agreement concerning the establishment of electronic payment infrastructure between Korea and the Central Asian country.
"Drawing on their extensive experience, I anticipate that Korean credit finance companies can contribute significantly to the provision of transaction systems and financing in the emerging markets of newly developing nations," Kim said.
BNK Capital, the first Korean financial firm to enter the Kyrgyzstan market, emphasized the possibilities in the Central Asian market during the meeting. It is currently operating two subsidiaries in Kazakhstan and Kyrgyzstan.
"The region is not only expanding its role as a strategic nexus between Asia and Europe, but also emerging as an alternative energy operator to the Middle East. It is also making efforts to open its market internationally and to innovate (its current system)," said Park Byoung-soo, an executive director of the BNK Capital.
"Additionally, the region also has more than 300,000 ethnic Koreans and holds a favorable stance toward Korea." The ethnic Korean population of the area is descended from ethnic Koreans who had been forcefully resettled from the Russian Far East during the Japanese colonial rule of the Korean Peninsula.
Park commented that BNK Capital has recently expanded its focus into Central Asia amid intensifying competition in Southeast Asia's financial market.
Oh Sung-heon, a managing partner at OhKim's Law, echoed this sentiment. "ASEAN market has long been considered a land of opportunity due to its high usage of the payment market and income expansion. However, it might be time to consider diversifying the focus of overseas expansion beyond just the ASEAN market."
As of 2022, 25 Korean credit financing companies are operating in 19 countries. Out of their 61 branches, 36 are situated in Southeast Asia, and 10 are located in Northeast Asia.
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