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SUMISHO MOTOR FINANCE Corp., a joint venture between Philippine Savings Bank and Japanese trading giant Sumitomo Corp., expects to deploy majority of its P2-billion seed money to provide affordable motorcycle financing in the country.
The joint venture, which was launched Wednesday night, is targeting to grab at least 15 percent of the robust motorcycle market in the country.
?Looking at the present motorcycle industry in the Philippines, 600,000 units of new motorcycles were sold last year. We believe that it will grow to over one million units per year in no time. We believe our entry will stimulate market growth further,? said Masao Tabuchi, Sumitomo?s general manager for automotive division, during the launch of the venture Wednesday night.
Hidetoshi Fukui, president of the joint-venture company Sumisho, said typical loan size would range between P50,000 and P80,000, payable from one to three years. He said the new financing company would focus on giving credit for the purchase of Japanese-manufactured commuter motorcycles like those made by Honda and Yamaha.
The joint venture is expected to roll out branches across the country starting in the first quarter of 2010 to capture rising demand. Fukui projected that by 2014, motorcycle sales in the country could hit 1.5 million. By that time, he said Sumisho would have opened 25 to 30 branches in strategic areas across the country.
PSBank president Pascual Garcia III said once the joint-venture company generates scale, it may seek a quasi-banking license from the Bangko Sentral ng Pilipinas which, in turn, would give it the flexibility to beef up funds for relending by accepting placements from selected investors. To date, however, Garcia said the paid-up capital of P2 billion jointly contributed by PSBank and Sumitomo was more than sufficient.
Since it is less expensive to put up a branch of a financing company compared to that of a bank, Garcia said the venture could use up majority of the seed capital immediately for lending.
While Sumisho itself will only provide financing, it is also talking to other institutions which may also provide insurance coverage to motorcycle users.
