Sanwa Bank announced Monday it will enter the consumer loan business by setting up a joint venture with two consumer finance firms, Promise Co. and Aplus Co. The joint venture, capitalized at 10 billion yen, will be set up April 1 and will start operations later in the year, Sanwa officials said. Sanwa Bank will own a 50 percent stake, Promise will hold 40 percent and Aplus 10 percent. The company will offer no-collateral, non-guaranteed loans to individuals, charging interest rates of 15 percent to 18 percent, the officials said, adding that the targeted clientele would be salaried workers who have been reluctant to borrow funds from conventional consumer moneylenders. The move will give Sanwa, a major city bank, a chance to reap the benefits of the lucrative consumer loan business, from which many banks have shied away. The joint venture would also allow Promise and Aplus to benefit from Sanwa's brand image, the officials said. Sanwa's move follows a similar one by Sakura Bank, which in September announced it will tie up with convenience store operator am/pm Japan Co., as well as Nippon Life Insurance Co. and Sanyo Shinpan Finance Co., to provide no-collateral consumer loans. The Sanwa-Promise-Aplus joint venture -- a company name has yet to be decided -- hopes to have 300 billion yen in outstanding loans in three years after the launch of operations.
