SET-listed digital finance firm Group Lease Public Company Limited (GL) is forecasting a major boost to its already flourishing business in Cambodia through a new partnership with True Money, a mobile-payment subsidiary of True Corp in Thailand, that will significantly increase the sales of GL’s financial services via True Money’s extensive network of about 5,000 agents spread out nationwide in Cambodia.
GL Finance (GLF, GL’s wholly-owned subsidiary in Cambodia) currently operates about 240 Points of Sales (POS) of its own in all parts of the country. “As a result of the new partnership, the 5,000 or so True Money small shops will become our sales agents. This will immensely improve our marketing and sales capability – without increasing our fixed costs,” stated Tatsuya Konoshita, chairman of GL’s executive committee. The True Money small shops are located even in small rural villages which will help extend GLF’s outreach to those areas.
Cambodia is already a key market for the GL Group. Of the 255.85 million baht net profit in Q2 this year, about 120 million baht was contributed from the operations in Cambodia and the profit number represents a three-fold increase from the roughly 40 million baht profit in the same quarter last year.
Mr. Tatsuya expected that the number of applications for loans will increase by about 50% in the fourth quarter this year as a result of the stepped-up sales drive through the new partnership with True Money and that the total number of loan applications next year will likely double – to be split half-half between GLF’s own POS and the True Money agents.
Calling it a win-win partnership, GLF CEO Riki Ishigami said: “I strongly believe our driving forces and cross-selling services shall provide us in the broader markets with big capacity to expand and operate successfully, particularly new opportunities for GLF to acquire a vast number of customers through True Money agents who can get commission in return, increase customer foot traffic which will boost usage of True Money’s money transfer services.”
The GLF CEO signed a memorandum of understanding (MOU) with True Money (Cambodia) Limited Managing Director Kong Mean in Phnom Penh on August 26 and the new partnership will become effective beginning September 1.
Parts of the Joint Cooperation Statement read: “GLF’s target customers are grassroots people who are mostly un-banked and in fact (they are) also True Money’s target customers. This mutually beneficial cooperation will create strong and unique synergies for GLF, True Money and its agents and thus, deliver robust business growth …”
Typically, the True Money shop operators who will from now double up as GLF’s sales agents will download GL Digital Finance Application (GL’s own-developed digital finance platform which has been successfully used in Cambodia) onto their smart phones, input prospective GLF clients’ information and send to the nearest GLF POS offices immediately. Then, GLF’s local-area credit officers will visit the potential clients to evaluate the loan applications. “This way, we can also fully utilize our staffs since our credit officers can visit 2-3 clients a day while at present they just visit on average 0.25 client daily,” Mr. Tatsuya said.
He added that even at the current rate of staffs utilization, GLF is already making good profits and therefore, the more effective staffs utilization will generate better results. Each GLF POS is staffed with 3 credit officers.
GLF at present handles financing for about 3,000 Honda motorcycles per month, which represents just 10% of the total motorcycles market in Cambodia. “The other 90% of the market is bought and sold in cash. This means there is enormous room for growth for our financing services,” Mr. Tatsuya said. Honda is by far the most popular brand in Cambodia and GLF has enjoyed a virtual monopoly because it has the exclusive rights to arrange financing for all Honda sales.
GLF also enjoys a virtual monopoly in the leasing of Kubota agricultural machineries in Cambodia where there is also huge growth potentials for this business since only about 20% of the total agricultural-machinery market is conducted through financing while the remaining major part of 80% is also cash-based. Meanwhile, the financing of solar panels is still a relatively new business and as such, there appears to be massive growth potentials.
The new alliance with the 5,000 True Money agents, Mr. Tatsuya noted, will accelerate the sales of solar panels in particular.