• A cautionary tale behind China’s aggressive growth. This highlights the importance of innovation, fundamentals, and healthy (and early) regulation.
• Massive interest in Indonesia. China operators struggling with go-to-market given limited portability of the China success model.
• Indonesia set to be a beneficiary of investment capital migration away from China. CROWDO well positioned to be a solid partner given its robust track record.
(Day 1: Here we are! Lendit China – “An AI Era”)
The Co-Founder and Group CEO of CROWDO, Reona (Leo) Shimada was a featured speaker at LendIt Fintech China 2018 which was held during September 6 to 7th in Shanghai. Leo had the distinction of being the only Indonesia representative on a discussion panel themed "An AI Era - Financial AI Use Cases” and also gave an insightful presentation titled “The Untapped Opportunity in Indonesia”.
During the panel on AI, Leo shared about “Crowdo ACE” which is SE. Asia’s first commercialized Artificial Intelligence powered credit assessment engine. He shared with the audience about the new value that AI was created by helping the unbanked gain digital credit profiles through Crowdo ACE so they could access financing.
In his presentation about the Indonesia market opportunity, Leo talked about the massive financial inclusion impact that P2P lending could deliver. He also shared deep insight(s) about why international operators, many of them from China, were failing to gain a meaningful foothold in the market, and what could be done to address these market entry challenges.
(Key Note: Scott Sanborn, CEO of LendingClub, interviewed by Ben Zhhai from HC Financial Service Group)
The atmosphere at the conference was very different from a year ago. Chinese Regulatory clamp down since December 2017 is resulting in massive P2P operator closures, and mass retail investor protests in China further dampening industry sentiment.
Consumer Lending P2P operators are seemingly the most vulnerable to negative industry sentiment – most players shifting messaging to articulate social inclusion and benefits to society. Business Lending P2P (seem) largely unaffected, focusing on expanding innovation through Artificial Intelligence and Blockchain.
The key difference between winners and losers seem to be whether the focus is purely on “superficials” – i.e., building book and financial engineering, or on ‘fundamentals’ – i.e., innovation on real problems and institutionalizing professional standards.
(Key Note: Alex Ho, CEO of Fox Fintech Group, speaking about SME Lending and Technology)
As a result of the local China market condition, one other noteworthy phenomenon is that China operators are now fighting for sources of capital due to negative domestic investor sentiment and tighter restrictions. In Indonesia, frontloaded industry regulation at an early stage by the OJK feels especially prudent given the current repercussions of having left China to grow unsupervised.
(Featured Panel: Leo Shimada, Group CEO of Crowdo, talking about AI use cases in fintech)
As a side benefit of the above trend, interest in the Indonesia market is massive. However, market leading China players struggle in their go-to-market – China P2P operator strengths become their shackles in Indonesia, such as:
• China: Cashless society versus Indonesia: Basic Banking and Cash oriented infrastructure.
• China: High level of digitization of data versus Indonesia: Offline and sporadic data sources and quality.
• China: Grow first and ask for forgiveness later versus Indonesia: Strategic and in-depth partnership and engagement with Regulators.
One year ago, there was an emerging industry interest of the benefits of strategic tie-ups between Indonesia and China operators – now that is called for closer examination given the challenges of porting over infrastructure and know-how to Indonesia.
On the other hand, the case for China operators doing tie-ups with local operators increases. Given there are no visible China-based P2P industry leaders in Indonesia and the majority of industry shutdowns of P2P operators in Indonesia have originated from China is telling.
Finally, we expect to see a material increase in institutional fund allocation to P2P Indonesia published investment opportunities. CROWDO is well positioned to be a beneficiary of this trend given its robust Indonesia P2P returns, industry lowest NPLs and professional standards with institutional clients from East Asia and North America.
CROWDO is an Artificial Intelligence powered marketplace for lending and investments. Its mission is to connect emerging market micro merchants and MSMEs with a global community of Investors. With a robust track record of returns and industry low NPLs, it is becoming a choice partner for Institutional Investors seeking to participate in emerging market debt investment opportunities. If you would like to request CROWDO’s presentation on Indonesia market opportunities, please contact us at [email protected]
[About Lendit China]
Lendit China is China’s leading event for innovation in financial services. Its aim is to empower international companies to capitalize on China’s new financial openness policies. The LendIt Fintech China Conference and Expo brings together leading banks, fintechs and investors from 30+ countries to learn, network and do business. Hot topics include: AI, One Belt - One Road, Fintech Innovation, Future Banking, BlockTech, and Compliance.