Asia Pacific Alternative Lending Business Report 2023: Widespread Expansion Expected in India, Indonesia and Across All Southeast Asia

DUBLIN, Dec. 13, 2023 /PRNewswire/ -- The "Asia Pacific Alternative Lending Market Business and Investment Opportunities Databook - 75+ KPIs on Alternative Lending Market Size, By End User, By Finance Model, By Payment Instrument, By Loan Type and Demographics - Q2 2023 Update" report has been added to  ResearchAndMarkets.com's offering.

Alternative lending market in Asia Pacific is expected to grow by 15.1% on an annual basis to reach US$295.0 billion in 2023. 

Medium to long term growth story of alternative lending in Asia Pacific remains strong. Alternative lending adoption is expected to grow steadily over the forecast period, recording a CAGR of 9.4% during 2023-2027. The alternative lending market in the region will increase from US$256.3 billion in 2022 to reach US$422.6 billion by 2027.

The Asia Pacific alternative lending industry is poised to record strong growth over the next five years. Driven by the growing shift toward credit solutions offered by non-banking institutions, coupled with the rampant rise in the e-commerce market, is aiding alternative credit demand in the region. India and China are expected to lead the industry growth across the Asia Pacific from the short to medium-term perspective.

In Southeast Asia, the competitive landscape has been growing at a rapid rate, as more and more firms are seeking to tap into the underbanked and unbanked population across the region. Going forward, the publisher expects a high amount of venture capital and private equity funding to enter the Asia Pacific alternative lending sector, thereby aiding innovation and market growth over the next three to four years.

A high proportion of underbanked consumers are embracing alternative lending platforms in Southeast Asia

The alternative lending industry is contributing significantly in driving financial inclusion in Southeast Asia. A high proportion of underbanked consumers are turning to alternative lending platforms in the region after they fail to secure financing from friends and families and conventional channels like banking institutions.

The report from the Cambridge Centre for Alternative Finance and the Asian Development Bank Institute, in December 2022, revealed that 66% of ASEAN consumers turn to alternative financing platforms after failing to secure credit from friends and families, and banks. The report also revealed that a growing proportion of consumers are opting for buy now pay later products to fund their purchases in the region.

Like retail customers, micro, small and medium-sized enterprises have also increased their usage of digital lending platforms in Southeast Asia, as businesses are failing to secure funding from banks and other sources such as friends and families. The percentage of businesses turning to alternative lending platforms is projected to further grow in Southeast Asia amid the current macroeconomic environment.

As the trend continues to grow in 2023, the publisher expects more firms to enter the market to serve the growing credit demand among retail and business customers. This will support the competitive landscape in the segment, while also aiding the overall industry growth from the short to medium-term perspective.

Alternative lending providers are seeking acquisition deals to expand their presence in the fast-growing fintech sector in India

Millennials and consumers from Tier I and II cities are driving the credit demand in India and the trend is projected to further accelerate over the next five years. The growing internet access and tech-savvy population mean that there is substantial headroom for growth in the Indian alternative lending market, especially in sectors like healthcare. To tap into this growth potential, firms are entering into acquisition deals to expand their presence across the country.

In March 2023, LoanTap, the digital lending platform, announced that the firm had entered into an acquisition deal with Unofin, the healthcare-focused fintech startup. The acquisition is part of the firm's strategy to expand its presence in the healthcare finance sector. The acquisition will also boost the gross loan disbursal for LoanTap over the next few years. As of March 2023, Unofin has serviced more than 120,000 customers with INR 1200 million of gross loan disbursal. Operating in seven cities in India, Unofin has forged alliances with 1,600 healthcare service providers.

With a large percentage of the Indian population lacking insurance, healthcare financing is projected to become a multi-billion-dollar market over the next few years. Consequently, expansion into the healthcare financing space is projected to accelerate the growth of Loan Tap over the next five years.

Digital lenders are expected to launch new lending solutions catering to the needs of businesses in Indonesia

In addition to the growing demand for alternative lending products in the B2C segment, the need for credit is also on the rise in the B2B category, especially for small and medium-sized businesses. The current macroeconomic environment, including high inflation and interest rates, means that access to traditional credit is becoming expensive for SMEs. Consequently, more and more businesses are expected to turn to digital lenders to meet their working capital requirements. As a result, the publisher expects alternative lending providers to launch new products and solutions catering to the needs of businesses in Indonesia.

Digital lenders such as PT Bank Neo Commerce have already announced the launch of new lending products for SMEs in Indonesia. This launch is aimed at driving the monthly active users of its applications to over 50%, compared to 30% to 40% as of November 2022.

Going forward, alternative lenders are also expected to follow the same strategy. The launch of these products, coupled with the entry of new fintech firms in the segment, will keep driving the competitive landscape as well as innovation in the Indonesian alternative lending industry over the next five years.

Scope

Alternative Lending Market Size and Forecast by Loan Types

• B2C Loans
• Personal Loan
• Payroll Advance
• Home Improvement
• Education/Student Loans
• Point of Sale
• Auto Loans
• Medical Loans
• B2B Loans
• Lines of Credit
• Merchant Cash Advance
• Invoice Factoring
• Revenue Financing

Alternative Lending Analysis by Consumer Attitude and Behaviour

• By Age
• By Income
• Gender

Economic Indicators

• Gross Domestic Product at Current Prices
• Population
• Unbanked Population
• Unemployment Rate
• Loan Default Rate

Alternative Lending Market Size and Forecast

• Transaction Value
• Average Transaction Value
• Transaction Volume

Alternative Lending Market Size and Forecast by End User

• End User - Business
• End User - Consumer

Alternative Lending Market Size and Forecast by Finance Models

• P2P Marketplace Consumer Lending
• P2P Marketplace Business Lending
• P2P Marketplace Property Lending
• Balance Sheet Consumer Lending
• Balance Sheet Business Lending
• Balance Sheet Property Lending
• Invoice Trading
• Debt Based Securities
• Equity Based Crowd Funding
• Real Estate Crowd funding

Alternative Lending Market Size and Forecast by Payment Instrument - Transaction Value, Volume and Average Value

• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money

Alternative Lending Market Size and Forecast by Payment Instrument to Model

Alternative Lending Market Size and Forecast by Payment Instrument to P2P Marketplace Consumer Lending

• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money

Alternative Lending Market Size and Forecast by Payment Instrument to P2P Marketplace Business Lending

Alternative Lending Market Size and Forecast by Payment Instrument to P2P Marketplace Property Lending

Alternative Lending Market Size and Forecast by Payment Instrument to Balance Sheet Consumer Lending

Alternative Lending Market Size and Forecast by Payment Instrument to Balance Sheet Business Lending

Alternative Lending Market Size and Forecast by Payment Instrument to Balance Sheet Property Lending

Alternative Lending Market Size and Forecast by Payment Instrument to Invoice Trading

Alternative Lending Market Size and Forecast by Payment Instrument to Debt Based Securities

Alternative Lending Market Size and Forecast by Payment Instrument to Equity Based Crowd Funding

Alternative Lending Market Size and Forecast by Payment Instrument to Real Estate Crowd funding

For more information about this report visit https://www.researchandmarkets.com/r/kcaobd

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