Ascend Money: Financing Thai Small Businesses Overlooked by Banks
- Tanyapong Thamavaranukupt, co-president of Thai fintech Ascend Money, believes spending habits-such as magazine subscriptions or mobile bill payments-indicate creditworthiness, especially in Southeast Asia where many people lack banking...
- "We don't rely on customary data to make our loan decisions," he told Fortune.
- This data builds a risk profile without needing financial statements, payslips, or credit bureau assessments.
Tanyapong Thamavaranukupt, co-president of Thai fintech Ascend Money, believes spending habits-such as magazine subscriptions or mobile bill payments-indicate creditworthiness, especially in Southeast Asia where many people lack banking services adn financial institutions are still developing.
“We don’t rely on customary data to make our loan decisions,” he told Fortune. Ascend Money’s lending service, Ascend Nano, uses data from its digital wallet-a service for storing, transacting, and making payments. “We can see what types of transactions users make, where they use their money, and the type of phone they’re using,” he explains.
This data builds a risk profile without needing financial statements, payslips, or credit bureau assessments. Such as, Tanyapong suggests a regular magazine subscription might indicate a higher level of education and income, making a borrower safer.
Tanyapong estimates 20 million Thais,out of a population of 70 million,could qualify for a loan. However, traditional banks only lend to about 5 million customers. That leaves roughly 15 million creditworthy Thais without access to financing. “It’s not because they’re not qualified,” Tanyapong says.”It’s simply as the traditional players…use the exact same model they’ve used for the last 30 years.”
Micro- and small-sized businesses frequently enough lack financial statements, preventing them from securing bank loans. Many traditional lenders also depend on credit bureaus, which don’t include many underbanked individuals, further limiting access to financing.
If banks don’t step in, loan sharks will
Lack of financial access is a regional issue.Around 225 million people in Southeast Asia didn’t have a formal bank account in 2021, according to the Center for Impact Investing and Practices. Approximately 350 million couldn’t access formal financing. The SME Finance Forum found in 2018 that over half of the region’s SMEs were unable to get financing.
Those needing money then turn to informal