Private lender OCBC NISP, the local arm of Singapore-based OCBC Bank, is intensifying its efforts to attract affluent customers to create expansion room for its credit card business amid a slow recovery in purchasing power.

The lender relied on a market segmentation strategy to survive the unfavorable economic environment last year. The strategy helped the bank book 18 percent year-on-year (yoy) growth in outstanding loans from its credit card business.

Although the amount of its outstanding loans last year still stood at below Rp 1 trillion (US$74.7 million), the bank, which is a late-starter in the business, expects to see the figure increase by 21 percent in 2017.

“Industry wise, outstanding loans in the [credit card] business declined last year but we still managed to maintain growth because we introduced [product] segmentation that targeted customers’ spending,” OCBC NISP unsecured loans division head Meri Ui said in Central Jakarta on Thursday.

The lender is also setting an aggressive growth target for the number of issued credit cards this year, she added. It expects the figure to increase by 25 percent from around 170,000 circulated cards currently.

OCBC NISP saw its total loan disbursement amount increase by 7 percent to Rp 88 trillion as of September last year. Its non-performing loans (NPLs) — the ratio between bad debt and total loans — stood at 1.5 percent, slightly higher than the 1.3 recorded in the same period in 2015.

The lender launched on Thursday its latest credit card product, namely the OCBC NISP Voyage, which targets Indonesia’s highly affluent banking customers.

The card, made of duralumin, offers its holders several services including travel insurance coverage worth up to Rp 10 billion, free access to lounges at more than 850 airports around the globe and Voyage Miles, which can be redeemed for airfares or full-service trips.

“Last year’s credit card business was full of challenges,” OCBC NISP president director Parwati Surjaudaja said. “However, we hope this year will be better. That’s why we are eager to launch the Voyage credit card so that it can trigger a reversal [in the business], making everyone more optimistic.”

The lender eyes around 300,000 affluent customers from the country’s total 17 million credit card holders. It targets to control a 10 percent share of the affluent customer market within the next five years.

The lender expressed optimism it could grab a slice of the country’s crème de la crème market due to a relatively small number of competitors.

For this year, OCBC NISP expects to see its loan disbursement increase by 10 to 15 percent on the back of a recovering economic situation. Meanwhile, its third party funds (DPK) are projected to grow by around 14 percent.

“Amid a plan from the authorities to cap deposits and credit card interest rates, we should be able to be more efficient, productive and creative to get new growth sources and not to rely on expensive interest rates” Parwati said.

Bank Indonesia (BI) has told banks to lower their credit card monthly interest rate to 2.25 percent by July to boost the industry’s sluggish loan disbursement. The central bank currently caps credit card monthly interest rates at 2.95 percent.

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