South Asia secured the top spot in Asia with the most significant potential for fintech lending, followed closely by Southeast Asia, a new analysis by UnaFinancial reveals.
South Asia ranked top with a multivariate average score of 1.152 points, while Southeast Asia secured 0.806 points.
Also Read: AI and automation: Transforming India’s lending landscape
Despite having the lowest digital penetration (37 per cent) of smartphone owners among Internet users and 34 per cent of digital payments users, South Asia benefits from a large share of the young population and strong fintech industry development. The region also stands out with 43 incubators for alternative lending companies and 118 funding rounds in the industry, making it the leading region in fintech investments and startup activity.
Southeast Asia boasts a strong digital infrastructure, with 59 per cent of the population using digital payments, 62 per cent of smartphone owners, and 24 incubators supporting the growth of fintech companies. Although the average income per capita (US$42) and investments in the sector are lower than in other regions, the high digital adoption and many alternative lending companies signal solid future growth prospects.
In comparison, West Asia and East Asia show lower growth potential. West Asia ranked third with a score of 0.773. The region benefits from the highest income per capita (US$66) and strong investment (US$2.31 billion). However, it still lags in establishing fintech companies and incubator support.
East Asia, with a score of 0.698, excels in digital payment usage (93 per cent) and mobile connectivity (124 per 100 people) but faces challenges due to a smaller share of young population and a reliance on traditional financial institutions.
“As fintech lending continues to develop across these regions, we can expect rapid growth driven by digital adoption, increased 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,” analysts of UnaFinancial said.
The study used a multivariate average methodology to compare the fintech lending potential across South, Southeast, West, and East Asia. Central Asia was excluded from the comparison due to its emerging stage of fintech lending development.
Also Read: How Generative AI will advance embedded lending
The study ranked regions based on 14 critical factors, including mobile broadband subscriptions, average income, internet usage, smartphone penetration, investment in alternative lending, share of the young population, number of incubators for the alternative lending sector, adoption of digital payments, access to bank accounts, access to formal credit, demand for borrowed funds, number of alternative lending companies and funding rounds.
—
Image credit: 123RF.
The post South Asia, SEA rank high in potential for fintech lending in Asia: Study shows appeared first on e27.