Although the US-China trade tensions could cause banks to scale back loans towards small-medium enterprises, the region's fintech operating in the peer lending space continue to grow their loan books.
Banks may be slowing down their lending activities amidst ongoing trade tensions and slower global growth but not the fintech players, especially those operating in the peer lending space. Validus Capital, which aggregates capital from institutional investors and high net worth individuals, and provides unsecured lending to small-medium-enterprises in Singapore, say that investor interest and lending activities have not slowed down.
«From our perspective, it is growing...we have not seen stresses on our SME brorrowers,» said Ajit Raikar, chief executive of Validus Capital in an interview with finews.asia. So far, the company has dispatched S$230m worth of loans since inception in 2015, and expect the momentum to continue.
Rising Interest From Institutions
Validus also noted that institutions now make up about 60 percent of its assets under management (AUM), or capital, versus 50 to 55 percent from a year ago. The rest of the AUM are from high net worth individuals. «As investors become more familiar with this alternative asset class (and the returns), we find that investors have increased their assets with us.»
Batumbu (Validus’ Indonesian outfit) has been registered with Indonesia’s Financial Services Authority (OJK) and could soon obtain a license to tap on the country's booming peer lending space. According to data provided by Indonesia’s Financial Services Authority (OJK), total loans distributed through P2P lending platforms reached 20 trillion rupiah ($1.4 billion) last year, a whopping 681 percent year-over-year increase from 2017’s 2.56 trillion rupiah (US$182.4 million).
Hiring In The Space Remains Vibrant
When asked if hiring in the fintech space has slowed down in recent quarters, recruiters say they have not experienced a slow down in mandates yet. «Hiring in P2P lending remains vibrant, especially in the micro-lending space,» said a senior director from a Singapore-based recruitment firm.
Moreover, well-funded fintechs or big tech firms such as Grab would have no issues matching the high pay of certain bankers if they really want them, noted the director.
Race to Reach The Unbanked
Fintech firms, including traditional banks, are hoping to get a slice of the micro-lending or peer-to-peer space that serves the unbanked population of Southeast Asia, which KPMG estimates to be 438 million people in the region. This results in certain opportunities for finance professionals with the right skills, observers say.
For smaller fintech firms who do not have huge funding, they are still able to attract talents away from banks if they have the right cards. «These founders need to find employees who are aligned with their purpose. If the employee is driven by passion, and be able to grow with the company, they could be willing to take a 30 to 40 percent discount to their last drawn salary,» said the recruitment consultant.
