SINGAPORE: South and Southeast Asia (SEA) are leading with greatest potential for fintech lending, according to a report by UnaFinancial. The study ranked regions of Asia based on 14 critical factors, comparing their fintech lending potential, with South Asia securing the top spot and Southeast Asia following closely behind.
South Asia topped the list with a score of 1.152, despite having the least digital adoption. Only 37% of smartphone users and 34% of digital payments users are active. However, the region’s young population and growing fintech sector set it apart. The region is home to 43 incubators supporting alternative lending companies and has seen 118 funding rounds in the fintech space.
SEA came in second with a score of 0.806. The region has strong digital infrastructure, with 59% of the population using digital payments and 62% owning smartphones. While the average income per capita is lower, at US$42, digital adoption is driving fintech growth, supported by 24 incubators in the region.
Meanwhile, West Asia ranked third with a score of 0.773. The region has the highest income per capita at US$66 and saw significant investment of US$2.31 billion. However, it lags behind in fintech company establishment and incubator support, slowing its overall growth potential.
East Asia, despite having more digital payments infrastructure, ranked fourth with a score of 0.698. The region excels in digital payment usage, with 93% of its population using these services, and mobile connectivity at 124 devices per 100 people. However, East Asia faces challenges due to a smaller share of its population being young, and dependence on traditional financial institutions
UnaFinancial analysts note that as fintech lending evolves in these regions, rapid growth is likely, driven by digital adoption, rising investment, and the expansion of alternative lending services.
“South and Southeast Asia are particularly well-positioned to lead this trend, paving the way for a more inclusive financial future,” they said.
UnaFinancial’s study looked at the fintech lending potential in South, Southeast, West, and East Asia using a multivariate average method. Central Asia was left out because its fintech sector is still developing.
Important factors considered include average income, mobile broadband subscriptions, internet usage, smartphone ownership, investment in alternative lending, percentage of young people, number of incubators for alternative lending, digital payment use, access to bank accounts, availability of formal credit, demand for loans, and the number of alternative lending companies and funding rounds. /TISG
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