President Lee Dong-cheol of KB Card, 3rd L, joins key officials of PT Finansia Multi Finance after signing an agreement to take over a 80-percent stake in the Indonesian consumer finance company for $81.3 mln on Nov. 24. (Photos: KB Card)

KB Kookmin Card will acquire a controlling stake in an Indonesian consumer finance company to expand its presence in the Southeast Asian country.

The board of KB Financial Group’s credit card affiliate approved the plan to buy an 80 percent stake in PT. Finansia Multi Finance (FMF) for $81.3 million.

Founded in 1994, the Indonesian lender specializes in auto and motorcycle loans with 255 billion won ($217 million) in total assets. KB Kookmin Card plans to complete the deal by the first quarter of next year.

In February, KB’s other affiliate, KB Capital, signed a deal with Indonesia’s Sun Motor Group to acquire an 85 percent stake in the automaker’s financing firm, Sunindo Parama Finance.

As one of South Korea’s top-tier banking groups, KB Financial has increasingly placed priority on Southeast Asia in search of a new growth engine, in tight competition with rival Shinhan Financial Group.

In July, the group’s flagship KB Kookmin Bank acquired a 22 percent stake in Indonesian retail lender Bank Bukopin, becoming its second-largest shareholder.

As the fourth most populous country in the world, supported by good political and economic stability, Indonesia’s large domestic market offers a wide range of investment opportunities for foreign and domestic investors.

With a target economic growth of more than 6% for the coming years, there is a growing emphasis for the government of Indonesia on attracting more foreign investment in order for the overall investment to reach the projected levels of 2,000 trillion Indonesian Rupiah (IDR), or approximately $222 billion, by 2014.

For the last 10 years the government of Indonesia has been actively introducing measures directed at encouraging investing in Indonesia and improving the country’s regulatory and economic environment.

Key measures recently introduced include amending the Investment Law in 2007 to provide more assurance on matters such as equal treatment among investors, ability to repatriate profit from Indonesia, investment incentives and protection from nationalization.

Another area of focus for the government is to improve the archipelago’s infrastructure. Through the Public Private Partnership (PPP) scheme, the government offers investment opportunities for the infrastructure projects to develop the country’s roads.

Investments in mining and agriculture sections are also actively encouraged. With a population of almost 240 million of which more than 80% are Muslim, Islamic economics and banking is also a potential growing sector in Indonesia.

Currently, establishing an Indonesian limited liability company is the most common form of operating as a foreign investor in Indonesia.

Other types of presence, such as representative offices or branches, could be established, but are subject to certain limitations on commercial activities and restrictions for certain sectors.

A view of the building where KB Card has offices in downtown Seoul.