The new 5G mobile technology stands to boost financial inclusion in Asia, according to a prediction distributed by Robocash Group.
The online lender says that about 3 million of the unbanked and underbanked will gain access to financial services in both Vietnam and the Philippines by 2025. Beyond those two countries, Robocash states that Indonesia will have 9-11 million, and India – 60 million gaining access.
While developed countries take for granted the ubiquity of smartphones and the internet everywhere, in the Asia Pacific region (APAC) mobile phone penetration is still growing at about 10.8% a year. An increase in the number of smartphone users in Indonesia is expected to rise to 89.9 million by 2022, the penetration rate will grow from 26% (2018) to 33% in 2023. In Vietnam, the share of smartphone users will rise from 34% in 2018 to 40% by 2021. The Philippines are predicted to show a similar increase to 40%, up from 32% in 2018. India may expect to have 36% of smartphone users in the country by 2022, i.e. 10% more than in 2018.
Robocash points to a report by the Cambridge Centre for Alternative Finance (CCAF) that indicates South-East Asia had the highest overall volume of $2.19 billion within the online alternative finance market in APAC (excluding China) in 2018. CCAF reports that alternative finance volumes across APAC (excluding China) have exhibited considerable growth from 2017 to 2018. From an estimated market size of $3.64 billion in 2017, the market grew by approximately 70% to an estimated market size of $6.17 billion in 2018. The APAC region remains one of the fastest-growing regions in the world.
As the active use of 5G rises, along with the Internet of things (IoT) and more, the segment of the population that is unbanked and underbanked are expected to see even more opportunities. Additional information can become a significant addition to the existing alternative data sources. The efficiency of credit scoring of new customers will improve too. Robocasch analysts beleive the expansion of 5G itself can add 5% on average to an annual increase in disbursements in macro-regional alternative lending.