ICFG Ltd (LON:ICFG), formally Fintech Asia Limited (LON:FINA) Chief Executive Officer Oliver Fox caught up with DirectorsTalk for an exclusive interview to discuss the reverse takeover of Fintech Asia Limited, what the group does, their business focus & strategy, and what we can expect in the near future.
Q1: First off, Oliver, could you just explain the transaction that’s taking place to bring ICFG Limited to market?
A1: ICFG is coming to the London market through a reverse takeover by Fintech Asia Limited. Fintech Asia Limited was listed in September 2022 as a main market acquisition company, focused on bringing financial technology businesses from Asia to the market.
So, the transaction with ICFG provides the perfect opportunity for Fintech Asia to achieve its initial strategy and bring an exciting growth business to the international capital markets. From here, to drive future international expansion and development as a London-listed company.
So, Fintech Asia Limited will be renamed ICFG Ltd following the RTO and is to be readmitted to trading on the main market with an opening market capitalisation of £130 million.
Q2: Can you give me a brief overview then of what ICFG does?
A2: ICFG is an innovative and fast-growing business that transforms the provision of financial services to individuals and to small businesses in emerging markets.
Primarily, this is about providing access to funding as a non-banking financial institution to those who would be considered to be unbanked or underbanked. This group of people make up a significant proportion of populations in emerging markets, where the traditional banking sector is unable to serve them in a way that is sufficient either for the provider or for the customer. Traditionally, this has led to an unfortunate lack of access to financial services in those markets.
The group uses advanced technology to enhance both the efficiency and effectiveness of back-office functions and to provide innovative customer interfaces through a mobile phone application and in-branch and beyond technology.
ICFG is bringing speed of service, convenience, and value to its customers in Central Asia. In addition, ICFG provides and facilitates investment opportunities through capital markets, such as corporate bonds and asset-backed securities, providing both returns for investors and as a source of investment capital to expand the non-banking financial institution business.
Q3: Can you tell me more about the company’s business focus and strategy?
A3: So, their business focus is really on four key areas.
As a non-banking financial institution, it’s there to serve the large underbanked populations in the countries in which it operates. This allows access to funding for small business development, as well as for consumer purchases or short-term lending needs. ICFG’s loan book is now in excess of $160 million, having grown from $60 million three years ago.
Secondly, the focus is bringing innovative solutions to emerging markets with securities products through the group’s investment banking arm, which is based in Mongolia. This element of the group also provides underwriting and brokerage services on the Mongolian Stock Exchange.
The third area is to provide enhanced property management services and investment opportunities in the property sector in emerging markets.
Finally, the underpinning element of the business is the development of cutting-edge proprietary software solutions to support the business with a focus on AI and machine learning.
Now, their strategy has been to expand the business both within existing markets of operation, as well as to take its scalable model into other markets, where it has the potential to reach a larger customer base. This takes the form of both direct and independent operations, as well as partnerships within the sector to share in the benefit of harnessing ICFG’s technological capabilities and market reach as a marketplace application.
So, even while in this current high-growth phase, the company is focused on maintaining and growing profitability, as well as in scale and top-line revenue. This is achieved through responsible operations of efficiency and growth of the cost base and a robust credit policy. This is supported by an in-house developed credit scoring system that quickly but intelligently identifies suitability and results in a comparatively low non-performing loan rate of about 6%.
Q4: What can we expect from ICFG Limited in the near future?
A4: The group is primarily developed in the Central Asian market of Mongolia and has been expanding into other Central Asian states, including the Kyrgyz Republic and Kazakhstan.
Overall, the Central Asian population suitable for operations by ICFG is around 70 million people, with Mongolia itself only around 4 million, but the initial source of this thriving business.
From here, the expectation is to expand the business into larger emerging market populations of Southeast Asia from ICFG’s well-positioned headquarters in Singapore. The market potential in Southeast Asia is closer to 500 million people, given the size of suitable market populations in the Philippines and Indonesia, as well as Cambodia and Vietnam.
Beyond geographic expansion, continued development and widening of the product offering across both non-banking and the investment banking arm present near-term opportunity, as well as the continued development for licensing of technology and AI solutions.
ICFG represents an exciting opportunity for business growth while also being able to contribute to the delivery of social goals, such as financial inclusion and economic development in emerging markets.
