PUTRAJAYA (Aug 21): Non-bank lender AEON Credit Service (M) Bhd (KL:AEONCR) expects the Middle 40% (M40) income customer segment to account for at least 40% of its total borrowers within the next two years, up from the current 32%, according to chief corporate officer Lee Kit Seong.

This is in line with the growing number of individuals who are transitioning from the Bottom 40% (B40) income group to M40 household income bracket.

“Our B40 [segment] is always higher [at 60%] — but now this segment is getting lesser, so this is why we need to build up our supply chain [within our customers],” Lee told The Edge after the launch of the group's new flagship branch at IOI City Mall here on Wednesday.

The target to capture a bigger market share from the M40 group, however, is not new to the group as it has been a consistent goal in the past few years.

The group has implemented several initiatives catering towards the needs of the M40 group, including financing for auto vehicles, small and medium enterprises (SME) financing, and a wide range of credit cards.

“With this flagship branch, we are actually aiming to increase [the M40 segment]. This branch is going to uplift our image and brand so that we can capture more M40 customers,” Lee said.

AEON Credit had revamped its two flagship branches — Setia City Mall and IOI City Mall — that now feature direct sales teams to enhance its physical network and improve its customer experience.

Although the group is ramping up its digital banking presence, especially with its recently launched Islamic digital bank, Lee said customers from the older demographic still prefer to make physical visits due to the rising fear of online scams.

“On average, I think some good branches will give us a million [RM] of personal loans in a month,” he added.

On its associate company AEON Bank, the country's first Islamic digital bank, Lee said the bank has received “overwhelming responses” since it was launched on May 26. The bank is expected to launch more new products in the next two quarters.

AEON Bank is a joint venture between AEON Financial Service Ltd and AEON Credit, both subsidiaries of Japan's largest retail group, AEON Group. It is only one of the five digital banks approved by Bank Negara Malaysia and the Ministry of Finance.

At 3.31pm, shares of AEON Credit were traded down five sen or 0.7% at RM7.05, giving the group a market capitalisation of RM3.6 billion. The stock has risen 26% so far this year.