Fintech companies in Southeast Asia are effectively addressing the loan deficit via the use of data.

In the Southeast Asian region, there is a growing trend among fintech firms to provide credit services to younger borrowers who have restricted availability of conventional financial services. This development is occurring concurrently with the digital transformation efforts of major financial institutions in the area.

The rapid emergence of purchase now, pay later services and digital banks in the area is effectively addressing a significant lending need. This is made possible by the extensive use of smartphones and e-commerce platforms, which enable fintech companies to access consumer data and assess the creditworthiness of individuals, even those with limited or nonexistent credit histories.

Lending services have emerged as a prominent aspect of the finance industry, as an increasing number of corporations are venturing into the banking sector this year by acquiring existing lenders or acquiring ownership interests in such institutions.

Ganis Pawestri, a 27-year-old individual employed as a secretary in downtown Jakarta, does not possess a credit card. In contrast, the individual utilizes a mobile application known as Akulaku to engage in online transactions for routine purchases and fashion-related items, amounting to an average monthly expenditure of around 800,000 Indonesian rupiah ($50).

Towards the conclusion of each month, she engages in the process of making payments using an online banking platform, which is under the operational purview of a firm affiliated with Akulaku. The monthly payments do not incur any interest costs. In the case of higher-value acquisitions, such as trip expenses, the individual in question opts to make payments in three equal installments, subject to an interest rate not exceeding 2%.