MUFG Bank's AI-driven transformation of small business loans in Japan

SME Banking
03/02/2024 News

According to Nikkei Asia, Japan's MUFG Bank, part of Mitsubishi UFJ Financial Group, is set to triple online small-business loans by 2026, leveraging artificial intelligence (AI). Targeting businesses with sub-3 billion yen ($20.8 million) annual sales, the bank aims to use AI for rapid analysis, providing loan decisions up to 10 million yen within a day without in-person consultations or physical documents.

With a dedicated team handling all-remote applications, the bank issues around 10 billion yen ($70 million) annually in online loans. In response to the fintech competition, MUFG Bank partners with accounting software companies Yayoi and Freee, allowing startups to apply for corporate bank accounts before formal establishment.

Facing a low adoption rate of only 5% among new small and midsize enterprises, MUFG Bank's AI strategy aims not only to stimulate business growth but also enhance profitability. Beyond online loans, the bank envisions expanding services to include corporate credit cards and accounts receivable financing, showcasing a forward-thinking approach in the evolving financial landscape.

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