Analyzing statistics of search requests, analysts of the company compared trends of demand for online loans in Singapore, Indonesia, Vietnam and the Philippines. The findings show that the situation in Singapore differs from other countries significantly. The demand in Indonesia, Vietnam and the Philippines demonstrates a clear ascending trend and fast development. However, in Singapore, with low development of online loans issued by alternative lending companies, there is no significant growth of their demand recorded by the systems for search analytics. At the same time, looking at the frequency of the search request of “online credit”, the increase is observed from late 2007 to 2015 and stops afterwards.
The reason is the faster economic development and dense area of Singapore, as opposed to its multi-island neighbours. Consequently, the country has an advanced financial sector, which is accessible for all residents. Taking into account the general maturity of the digital sphere, it’s obvious that the fintech services started developing here earlier, but within the traditional banking sector.
The legislative regulation of lending in Singapore also makes an impact. Limited interest rates make it more profitable for alternative lenders to work with the business community. According to the University of Cambridge, in 2017, 99% of issued alternative loans there fell under the business segment. In the Philippines and Vietnam, the situation is opposite: only 7% and 10% of loans respectively accounted for business sector. In Indonesia, the distribution is more balanced: 72% were business loans and 28% – consumer loans.
Moreover, the demand for online loans is affected by the age of the population. According to the United Nations, the average age of Singaporeans is 40, Filipinos – 24, Indonesians – 28 and Vietnamese – 30. The young age and lack of access to banking products are the main driver for the development of alternative lending in Indonesia, Vietnam and in the Philippines. This is confirmed by the statistics on 200,000 online loans issued by the companies of Robocash Group in Southeast Asia (the Philippines, Vietnam, Indonesia), where 49.9% of borrowers are under 30.