Even though Aspire may be backing away from Indonesia, other lending platforms are sanguine about the country’s prospects. Last September, Singapore-based digital lending platform Validus secured a debt funding of up to US$50 million from HSBC to expand its SME lending business in Indonesia through its local subsidiary, Batumbu. Batumbu has reportedly grown profits in recent years and consistently achieved EBITDA margins exceeding 50%. Validus has a strong presence across Southeast Asia and has disbursed over US$5 billion in SME loans across Indonesia, Singapore, Thailand and Vietnam. The success of Validus Group attracted GXS Bank to propose an all-cash deal to acquire its Singapore subsidiary, Validus Capital, which has provided over US$1 billion in financing to Singapore SMEs, mainly in the areas of supply chain and working capital loans. However, it has not been all sunshine and roses for Validus, as the company recently had to cease new loan disbursements in Vietnam due to delays in regulatory approvals. As a result, Validus’ loan book in Vietnam has been reduced by more than 50% over the past year, and it is now forced to focus on debt collection and serving existing investors and customers.

Nevertheless, the growth potential of Southeast Asia’s SME lending market continues to attract digital lending platforms from around the world. Australian business lending platform, Bizcap, recently announced its official launch in Singapore, where it focuses on providing business loans with flexible terms and fast processing times. Bizcap has already funded over S$6 million in deals and established partnerships with over 100 local brokers and advisors. Singapore will be Bizcap’s fourth market, as it already operates in Australia, New Zealand and the UK.

These developments show us that SME lending fintech platforms have started to figure out the markets that are best suited for their specific lending model and credit scoring algorithms. Validus’ anchor-led supply chain financing model complemented by its proprietary algorithms and data science tools seem to be generating results in emerging markets such as Indonesia. Meanwhile, Bizcap which utilizes open banking integrations and automated bank statement aggregation to assess business performance beyond traditional credit scores, is seeing success in more developed markets. As the landscape continues to shift, we may see further collaborations and even consolidation among key players as buying a successful SME lending platform could be more cost-effective than attempting to replicate its success internally.