Crowdfunding Could Revitalise Asian Markets

Audrey White

Throughout Asia, crowdfunding and other alternative finance models are revamping the way citizens and companies launch new ventures. Experts can’t say just how big crowdfunding has become in Asia — and its huge capacity is as of yet immeasurable.

A new examination of crowdfunding markets in Asia from Cambridge University, Tsinghua University and the University of Sydney, and in partnership with KPMG Australia, has determined there are between 2,000-3,000 platforms in China, and those amount to 80 to 90 percent of the market in the region.

“We tend to think of alternative finance in terms of advanced and developed markets, but we see evidence of a very sophisticated approach in Asian markets, particularly in data analytics,” said Robert Wardrop, executive director at Cambridge Centre for Alternative Finance. “We expect to see the vast majority of platforms dealing with debt-based lending. The regulatory environment is deeply unclear; there doesn’t appear to be a clear regulatory framework. We’ve just kicked off the pre-fieldwork part of the study, so we’ll find out in due course!”

That study is due out by the end of the year. Other experts agree that the China market is constantly growing and has huge potential.

“The China market alone could represent USD 48 billion in crowdfunding by 2020, if the country liberalises its law to allow more equity funding,” said Richard Swart, global crowdfunding and alternative finance researcher at the University of California, Berkeley, Haas School of Business.

And in other Asian countries, crowdfunding is beginning to take hold. Singapore-based Crowdo has recently begun an expansion into Indonesia and Malaysia, for example. It will be one of just six crowdfunding platforms operating in Asia under recently-approved rules for the industry. As Crowdo, formerly known as Crowdonomic, works to expand throughout Southeast Asia, it has begun by announcing plans to launch a peer to peer lending platform in Indonesia and an equity crowdfunding platform in Malaysia. This, the company states, will secure Crowdo’s place as the crowdfunding platform with the most comprehensive array of services in the region.

Crowdo CEO and founder Leo Shimada says SMEs in Indonesia are underserved by traditional financial markets, leaving many people without adequate access to the credit they need for their businesses to thrive.

“Our clients have robust businesses with sound repayment capabilities but are unable to access traditional financing systems due to the lack of existing relationships with financial institutions. Crowdo’s P2P lending is a powerful enabler for these high growth businesses in Southeast Asia.”

FinTech is taking off in other markets, as well. We should all have an eye on Asia for innovative ideas and rapid growth in the crowdfunding industry.

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