Alternative lending, payments dominated Asian fintech landscape in 2022: Report

In its recent report on the state of Southeast Asian (SEA) fintech companies, Robocash Group revealed that alternative lending and payments were two of the most dominant categories of fintech services in SEA and South Asia in 2022.

The report was based on data collected from an analysis of the number of fintech companies operating in different countries in the region: India (541 companies or 43.1 percent), followed by Indonesia (165 companies or 13.2 percent), Singapore ( 162 companies or 13.2 percent). 12.9 percent), the Philippines (125 companies or 10 percent), Malaysia (84 companies or 6.7 percent), Vietnam (78 companies or 6.2 percent), Pakistan (51 companies or 4.1 percent), Sri Lanka (27 companies or 2.2 per cent), with the smallest being Bangladesh (21 companies or 1.7 per cent).

Based on the data, the largest number of companies is focused on the alternative lending sector (544 companies or 43.4 per cent), followed by Payments & Transfers (496 companies or 39.6 per cent), E-Wallets (118 companies or 9, 4 per cent ), with the smallest being Digital banking (96 companies or 7.7 per cent).

It also highlighted the development of the fintech industry in the region based on the large number of companies operating: by the end of 2022, there are 1,287 companies in the nine countries and four sectors surveyed, of which 1,254 (15.4 percent of the total number) the number of total active fintech companies, not just the four sectors surveyed) has a status of not Undefined (missing data from the open sources).

“In the period from 2000 to 2022, the total number of companies increased by 3,588 percent – from 34 to 1,254. The largest increase occurred in the period from 2015 to 2020, which marked the basis for approx. 62 percent of all existing companies from the four sectors surveyed,” the report states.

Also read: Understanding the role of fintech, blockchain in the transition to net zero

On making money and making money

In addition to looking at the number of companies operating in the region and the funding they had raised in recent years, the report also looked at other factors, such as earnings, to determine the state of the fintech industry.

It evaluated the amount of funds raised for the entire period from the date of the company’s foundation to December 31, 2022 and the amount of income in 2021.

“The volume of turnover will be perceived by us as the volume of transactions related to the company’s primary activity,” the report explained.

“Throughout history, fintechs in the four sectors studied have raised a total of USD 53.3 billion and earned USD 17.8 billion. Roughly speaking, their total return (Total Revenue / Total Funding) is approximately 33.4 percent, which means , that for every dollar attracted, fintechs earn an average of 33.4 cents per year on transactions related to their activities,” it added.

As the country with the largest amount of funding raised at USD 25.6 billion (48 percent), India tops the list of top earners at USD 10 billion (57.2 percent) in 2021, followed by Indonesia at 2.4 billion USD (13.7 percent), Singapore with 1.9 billion USD (10.6 percent).

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“However, in terms of return on investment (Total Revenue / Total Funding), the most efficient country is, strangely enough, Bangladesh (7840.9 percent), then Pakistan (686.4 percent),” the report emphasized.

In SEA, Vietnam tops the list (117.6 percent), followed by Indonesia (68.7 percent) and Malaysia (48.5 percent).

“Such extreme values ​​in the first two countries (Bangladesh and Pakistan) are due to almost zero fundraising rates, while their revenue levels are still below the SEA average,” the report concludes.

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