Our very own co-Founder and CEO: Charis Liau shared her thoughts on Fintech in Singapore with The Worldfolio.
ASEAN, with a population of over 630 million people, is one of the fastest growing economies in the world. There are still a lot of challenges facing the region. What, in your opinion, is technology and particularly FinTech essential in the development of the region?
The ASEAN market is the world’s 3rd largest market after China and India. 70% of the ASEAN population is less than 40 years old and with the massive emergence of the digitally active middle-class population, the internet economy is expected to grow to USD 200 billion by 2025. By 2020, it is expected that there will be more than 480 million internet users. However, 70% of this population is unbanked.
Technology, in particularly Fintech, is able to lower costs significantly and digital finance can accelerate access to financial services for the unbanked in ASEAN. Having access to basic banking services (payments, remittances, insurance etc.) and even financing (through marketplace lending platforms) can boost the GDP of economies and bring profound changes and improvement to the lives of the people living in this region.
In Singapore, the fintech revolution has just begun. With the strong support of the Monetary Authority of Singapore (“MAS”) and Enterprise Singapore, we are creating a smart financial eco-system comprising of borrowers, lenders, and insurance partners, institutional providers of liquidity to bring about a more vibrant, sustainable community to serve the needs of the underserved and unbanked companies. SMEs in Singapore contribute about 45% of the GDP and employ 69% of the population but 40% of them remains underbanked and underserved. Using our proprietary credit scoring model with over 200 data points of each borrower, we are able to curate a strong portfolio of credit-worthy borrowers who would traditionally be underserved or unserved by the traditional credit providers.
As a leading fintech company, our objective is to automate as much processes as we possibly can. The founding management team comprises of very experienced former investment and corporate bankers with over 155 years of banking and finance experience. We developed our own proprietary credit scoring algorithm, “Mintgrade” taking into account data from a wide variety of sources including banks, financials, third party contracts, Singapore credit bureau as well as third party credit checks from Experian and Dun & Bradstreet. The Mintgrade is a useful measure of the underlying risk profile of each transaction and provides our investors with a quick overview of the risk of the deal in their decisioning process. We are also breaking new ground by introducing psychographic tests which will add a new dimension to our credit assessment. The psychographic test enables us to determine the “willingness” of the borrower and/or the promoters in repaying a debt.
This article was contributed by The Worldfolio.