CrowdLending (Business) - Southeast Asia

The projected total transaction value in the Crowdlending (Business) market market in Southeast Asia is expected to reach US$1.40bn in 2024.
When compared globally, it is evident that China leads with a transaction value of US$16bn in the same year.
In Singapore, CrowdLending platforms are gaining popularity among small businesses for capital raising due to their flexibility and competitive interest rates.

Definition:

Crowdlending platforms, otherwise know as lending-based Crowdfunding enable small and medium-sized enterprises to get loans from single or multiple, private and institutional investors via an online brokering platform. On credit platforms such as Funding Circle, OnDeck, Kabbage and Lending Club, businesses can obtain small loans up to a set maximum value. As a rule, financing requests are analyzed by the provider via an internal scoring system and are checked against additional minimum requirements such as turnover. Subsequently, these financing requests can be invested in by private and institutional investors at an appropriate interest rate determined by the credit rating of the company. This makes it possible for SMEs to borrow quickly and easily, as the basic requirements for obtaining finance are more flexible compared to traditional bank loans.

Alternative financing for SMEs and freelancers (bank-independent loans)
Small business loans issued by single or multiple private and institutional investors (non-banks)
Online loan request, scoring and approval

Traditional bank loans
Consumer loans and credit card transactions
Business-to-Business credit scoring and rating services
Online marketplaces for consumer loans (see Marketplace Lending)

The CrowdLending (Business) market in Southeast Asia is experiencing significant growth and development, driven by various factors such as customer preferences, market trends, local special circumstances, and underlying macroeconomic factors.

Customer preferences: In Southeast Asia, there is a growing preference for alternative financing options among businesses. CrowdLending platforms offer a convenient and efficient way for businesses to access funding, bypassing traditional banking channels. This is particularly attractive for small and medium-sized enterprises (SMEs), which often face challenges in obtaining loans from banks due to stringent requirements and lengthy approval processes.

Trends in the market: One of the key trends in the CrowdLending (Business) market in Southeast Asia is the increasing adoption of technology. Many CrowdLending platforms leverage digital platforms and advanced algorithms to streamline the lending process, making it faster and more accessible for businesses. This trend is driven by the region's high mobile penetration rate and the growing acceptance of digital financial services. Another trend is the emergence of specialized CrowdLending platforms catering to specific industries or sectors. These platforms understand the unique needs and risks associated with different industries, allowing them to provide tailored financing solutions. For example, there are platforms that focus on providing funding for startups, real estate projects, or agricultural businesses.

Local special circumstances: Southeast Asia is a diverse region with unique local circumstances that influence the development of the CrowdLending (Business) market. One of these circumstances is the large number of unbanked or underbanked individuals and businesses. CrowdLending platforms can bridge this gap by providing access to financing for those who are excluded from the traditional banking system. Additionally, the region's economic growth and increasing entrepreneurial activities contribute to the demand for alternative financing options. As more businesses are established and seek funding for expansion, CrowdLending platforms offer a viable solution for accessing capital quickly and efficiently.

Underlying macroeconomic factors: The development of the CrowdLending (Business) market in Southeast Asia is also influenced by underlying macroeconomic factors. The region's favorable economic conditions, such as robust GDP growth, rising disposable incomes, and a growing middle class, create a conducive environment for businesses to thrive. This, in turn, drives the demand for financing options and contributes to the growth of the CrowdLending market. Furthermore, government initiatives to promote financial inclusion and support SMEs play a crucial role in the development of the CrowdLending (Business) market. Governments in Southeast Asia are implementing policies and regulations that encourage the growth of alternative financing platforms, fostering a supportive ecosystem for businesses to access funding. In conclusion, the CrowdLending (Business) market in Southeast Asia is experiencing rapid growth and development due to customer preferences, market trends, local special circumstances, and underlying macroeconomic factors. The increasing demand for alternative financing options, the adoption of technology, the emergence of specialized platforms, and favorable macroeconomic conditions all contribute to the expansion of the market in the region.

Data coverage:

The data encompasses B2C enterprises. Figures are based on transaction values / revenues / assets under management and user data of relevant services and products offered within the FinTech market.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer spending, population, internet penetration, smartphone penetration, credit card penetration, and online banking penetration. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

Crowdfunding is the collective effort of a large number of individuals who network and pool small amounts of capital to finance a new or existing business venture. Each campaign is set for a goal amount of money and a fixed timeframe, each day is counted down and the money raised will be tallied up for visitors to follow its success. The size of the global crowdfunding market is growing and the largest markets are North America and Asia.