coming to Fiji

Why MBf is coming to Fiji

By Martin Tiffany

ALEX Lovell joined his palms together and inter-locked his fingers to describe his company’s position in Fiji.

“Imagine a scrum in rugby,” he said

as he brought his hands together, “we are behind the pack giving it an extra push as it faces the competition.”

The “pack” described by the 38-year-old Sri Lankan born is the National Bank of Fiji (NBF) and the “push” is coming from MBf Finance Berhad, one of Malaysia’s largest financial institutions.

Recently Lovell, the presi dent of MBfs South Pacific

operations, set-up the regional

office of MBf Finance (for merly Malaysia Borneo Fi nance Corporation) in Suva while at the same time im

plementing a joint venture

agreement with the NBF.

This joint venture is the National MBf Finance (Fiji) Ltd, a financial institution set to become operational early next month, offering products and services unique to Fiji.

The new company, in which NBF has 51 per cent shares and MBf 49 per cent, is described by Lovell as the “perfect marriage”.

“NBF in this marriage has the know-how locally and is familiar with the business en vironment, while we have the products and the expertise to back them up,” explained

Lovell, a Papua New Guinea citizen who was based in Port Moresby.

National MBf Finance will introduce factoring to Fiji, be involved in leasing, and issue of Master Card, although it is still waiting for Master Card Interna tional approval. MBf is the largest issuer of Master Card in Malaysia with a 50 per

Lovell: behind the pack

cent market share. Westpac Banking Corporation are Fiji agents for Master Card and Lovell says they will have to compete with them for market share on the “open market”.

He explained that factoring is “like privatising your sales ledger system” and will service mainly small and medium sized companies. He said the new company will assess your company and the goods supplied and if satisfied will give a 30-day credit system. This pro vided 70 to 80 per cent of the value of the goods supplied while you are waiting for payment.

The leasing arm of the new Fiji company will provide financial leases as well as industrial and consumer hire purchase facilities. Lovell said the busi ness being set-up is “service oriented” and he is sure the new ideas will be appealing and boost the position of NBF

in Fiji.

The state-owned NBF competes for market share mainly with the two Australian banks, ANZ and Westpac.

The other commercial banks are India’s Bank of Baroda and the recently opened Habib Bank, from Pakistan.

MBf and NBF set up National MBf Finance with F 5500,000 each and this will employ four or five local staff and two expatriates. The financial controller will be Jack Tong, who works for MBf in PNG as group financial controller, while a general manager has still to be appointed.

The establishment of the Fiji oper ations is a strategic investment for the MBf Group in the Pacific and comp lements the special relationship Malaysia and Fiji have established for nearly half a century.

In January 1987 the MBf Group acquired a 35 per cent stake in MBA Australia, an Australian incorporated and Quoted company, which was used to spearhead its expansion abroad. A year later, the group extended its financial operations to Jakarta and obtained a merchant banking licence to operate in

Png.

In March 1989, with Lovell at the helm, MBf began merchant banking operations in PNG and today is involved in leasing, factoring, personal loans, issuing Master Card and life and general insurance in that country. Lovell said that since starting their life insurance business in PNG in March 1990 MBf has captured 40 per cent of the market and hopes to increase it to 60 per cent in the next couple of years.

He said now that they have business in Indonesia, PNG, Australia and Fiji and are in the process of “taking stock. What we have to do now is look at what we are doing in the various countries and ask ourselves if it is the right thing.”

Lovell said that in the long term they will look at other Pacific countries. Also, that expansion to New Zealand is “certainly on our cards.”

MBf is always on the lookout for a

good investment. In Australia MBPs investment is worth nearly As2s million.

Lovell said the recession there has made them slow down and review their business. However, he expects Australia to bounce back on top in about two years.

On Fiji’s economy, Lovell said: “Mal aysia has undergone all the problems that Fiji is undergoing and the Fiji market is in the process of learning.”

Lovell was made a Member of the Order of the British Empire (MBE) last year for his contribution to merchant banking in PNG. Fie holds a Masters Degree in Business, is an Associate of the Chartered Institute of Management Ac counts (UK) and an Associate Fellow of the Australian Marketing Institute. He is a merchant banking specialist. As MBPs regional head, he will spend 10 days a month in PNG.

Before going to PNG 12 years ago, Lovell worked in Saudi Arabia, London and Australia. In PNG he worked for the Department of Finance, in charge of investment, and was also chief executive for the government’s pension fund.

The MBf Group, whose assets and investment worldwide are worth around

USS 2 billion, further strengthened their

position recently when it took over KUMB, a large finance company in Malaysia. MBPs concerns include prop erty, education, credit card services, travel, construction, media, insurance and a franchise for a fast food chain. □