Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

A chartered management accountant with more than 10 years of rich experience in investment research and financial analysis. Worked as an equity analyst for one of the world's largest asset managers with USD2.5trn in AUM covering numerous sectors including chemicals, retail, tech, autos, telco, real-estate and banks, globally. Experienced in fundamental equity research, industry research, commodity studies, forensic accounting, and due diligence reviews.

Equity Analyst

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Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Thematic (Sector/Industry)

Philippines Consumer finance / Thematic (Sector/Industry)

<div class="content-highlight"><p><strong>This report was commissioned by the next-generation investment platform iSTOX, which puts previously out-of-reach opportunities like private equity, hedge funds and private debt in the hands of more investors. To learn more, go to istox.com.</strong></p></div><div>The alternative finance market in South East Asia (SEA) is relatively underpenetrated, accounting for less than 1% of global transaction volume. Alternative lending refers to any form of lending that takes place outside a traditional banking institution. Indonesia, despite being the largest alternative finance market in the region, has a per capita alternative finance transaction volume of only $5 compared to $155 and $187 respectively in China and the USA. The penetration is even lower in other SEA markets, except in Singapore, where business lending takes precedence.</div><div></div><div>Despite the relatively low penetration, there is a significant opportunity for the alternative lending industry in the SEA region, particularly in markets such as Indonesia, the Philippines, and Vietnam. Strong growth in consumer spending coupled with relatively low banking penetration and the tendency to borrow from informal sources (such as credit from friends, relatives, moneylenders, landlords, etc.) bode well for the alternative lending industry in these markets. There is also a significant opportunity for the alternative lending industry to bridge the financing gap for SMEs in the region. SMEs are a big part of SEA economies accounting for around 30%-50% of GDP; however, poor access to finance is one of the top issues for SMEs in the region.</div><div></div><div>Singapore and Indonesia are the only SEA countries that currently have specific regulatory frameworks for the alternative lending industry. However, more than 80% of the alternative financing platforms in Singapore, the Philippines, and Malaysia believe that regulations are adequate and appropriate. The regulatory environment in Indonesia seems somewhat restrictive given that only around 64% of the alternative financing platforms deem that the regulations are favourable.</div><div></div><div><div>The alternative lending market in SEA is highly fragmented with the presence of a large number of small players. Nevertheless, a few notable established players also exist. Akulaku (Indonesia), FinAccel (Singapore), and Funding Societies (Singapore) are the largest alternative lending companies in the region in terms of funds raised.</div></div>

This report was commissioned by the next-generation investment platform iSTOX, which puts previously out-of-reach opportunities like private equity, hedge funds and private debt in the hands of more investors. To learn more, go to istox.com.The alternative finance market in South East Asia (SEA) is relatively underpenetrated, accounting for less than 1% of global transaction volume. Alternative lending refers to any form of lending that takes place outside a traditional banking institution. Indonesia, despite being the largest alternative finance market in the region, has a per capita alternative finance transaction volume of only $5 compared to $155 and $187 respectively in China and the USA. The penetration is even lower in other SEA markets, except in Singapore, where business lending takes precedence.Despite the relatively low penetration, there is a significant opportunity for the alternative lending industry in the SEA region, particularly in markets such as Indonesia, the Philippines, and Vietnam. Strong growth in consumer spending coupled with relatively low banking penetration and the tendency to borrow from informal sources (such as credit from friends, relatives, moneylenders, landlords, etc.) bode well for the alternative lending industry in these markets. There is also a significant opportunity for the alternative lending industry to bridge the financing gap for SMEs in the region. SMEs are a big part of SEA economies accounting for around 30%-50% of GDP; however, poor access to finance is one of the top issues for SMEs in the region.Singapore and Indonesia are the only SEA countries that currently have specific regulatory frameworks for the alternative lending industry. However, more than 80% of the alternative financing platforms in Singapore, the Philippines, and Malaysia believe that regulations are adequate and appropriate. The regulatory environment in Indonesia seems somewhat restrictive given that only around 64% of the alternative financing platforms deem that the regulations are favourable.The alternative lending market in SEA is highly fragmented with the presence of a large number of small players. Nevertheless, a few notable established players also exist. Akulaku (Indonesia), FinAccel (Singapore), and Funding Societies (Singapore) are the largest alternative lending companies in the region in terms of funds raised.

Reaching Out to the Underbanked: The Alternative Lending Opportunity in South East Asia