Part of this is due to Japanese law, which prevents Japanese banks from owning more than 5% of a non-financial company (fintech included). Remaining below this threshold means that creating genuine strategic partnerships is difficult.
Yet this legislation is changing, as is Japanese banks' approach to venture funds, with financial services giant Mizuho announcing it is joining the CVC club.
Although Mizuho has not disclosed the size of its fintech fund, it is expected to be about $50m-$100m and to expand significantly later this year. Banking law is due to be amended soon to allow Japanese banks to exceed the current limit of 5 per cent voting rights in a non-financial company. Fintech companies fall into this non-financial category, stymying attempts by Japanese banks to participate in a global flurry of investment into fintech start-ups that analysts say surpassed $10bn last year. Mizuho, unlike MUFG and SMFG, avoided buying major domestic consumer lending companies during the 2000s and thus is not saddled with a vast residential property portfolio.
