Fintech and alternative lending: Investment prospects of Southeast Asia

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A good investment is not easy to find, and sometimes, investors have to spend time looking for it. Still, there are different opportunities, and one of them is alternative lending. Surely, this market behaves like an underdog in many developed countries, but some regions prove it to be a diamond in the rough. Southeast Asia turned out to be one of the most outstanding among such regions. While the growth potential of its mostly agricultural countries is impressive, there are a few more things to consider.

So let’s have a quick look at 5 reasons to invest in alternative lending in this region.

Economic growth potential and low credit product penetration

The economy of ASEAN is on the rise. Its growth is twice as fast as in the rest of the world. Combine it with low credit availability for the population, which even by the most optimistic statistics rarely exceeds 50%, and you will get a powerful mixture for a highly “explosive” market that can skyrocket anytime. Well, in fact it has already done it. Still, the huge space for extensive growth means that alternative lending will keep developing without risks to run out of steam any time soon.

The side effects of the actively developing economy have enhanced the dynamics. It turns people into “consumers”, making them spend more. At the same time, this leads to a higher demand for low- and middle-size loan products.

Less competition from banks

Banks in the region are mostly focused on prosperous private clients and large organizations. It contrasts with the high economic inequality among the population and leaves a lot of people unbanked. Indeed, these are high-risk customers without strong credit history who live in areas with poor infrastructure. They usually go for smaller loans as well. However, while being underserved by banks, these people make a suitable customer base for alternative lending. Especially, when it comes to the use of financial technologies.

Smaller loans dominate the market

As already mentioned, people from ASEAN countries tend to take smaller loans. Asia generally goes toe to toe with Africa with its average loan size of 300 USD. In ASEAN, the majority of the loans range from 100 to 150 USD (according to Robocash Group statistics). Small loans belong to microfinance sector, which is following the path of fintech.

Government interest and regulatory framework

Governments are usually also interested in alternative lending. It covers the needs of the population and stimulates consumption leading to the rise of GDP. This results in the rapid creation of regulatory framework and comfortable environment for fintech and alternative lending in particular. This means higher stability and official approval, which bolsters trust of potential clients.

Internetization and overall fintech adoption

Close connection of fintech and alternative lending is a benefit for the latter. Online lending allows companies to decrease costs and ensures more convenience for the clients. These competitive advantages are highly important.

Fintech is on the rise in the world, but Asia is leading the way. In ASEAN, this growth goes along with rapid adoption of Internet usage, which makes client scoring much easier. People grow more accustomed to Internet services and start trusting them. Yet, lending remains significantly undervalued in comparison to other branches of fintech. And the undervalued is what investors are looking for.

A few things to consider…

Although there are a lot of pros, we have to mention cons for the sake of objectivity. The segment is truly rich with potential and attracts more and more players even now. Chinese fintech giants are moving towards the market. Local banks are also watching the progress of online lending to take their share back one day. However, this is only a minor drawback to consider rather than a particular concern. This results in industry being more ready than ever to receive additional funding and bring benefits to its supporters. So be sure to check this out for yourself!


Robocash d.o.o („Robocash“) ist ein in der Republik Kroatien unter der Registrierungsnummer 081224371 registriertes Unternehmen mit Sitz in Petračiceva 4, Zagreb, Croatia, 10110.

Robocash unterliegt keiner Finanzdienstleistungslizenz. Wenn man am Robocash investiert, kauft man Anspruchsrechte für Kreditforderungen und Investitionen in Kreditforderungen unterliegen Risiken. Wir empfehlen, die Anlagen zu diversifizieren und die Risiken sorgfältig abzuwägen.