Southeast Asia’s biggest lending startup sees a cautionary tale in China, where a decade of freewheeling growth in digital loans collapsed spectacularly under the weight of frauds and crackdowns.
The region has benefited from “preemptively regulating” against bad actors, says Funding Societies, a Singapore-based company that has raised $144 million from investors led by SoftBank Group. And that is why CEO and co-founder Kelvin Teo would be happy to see even more regulation — to a degree.
In an interview with Nikkei Asia, Teo said he welcomed balanced rules that ensure financial technology like his is safe, but that do not “choke off” new fintech entrants. Escrow thresholds, for example, could be high enough to keep swindlers from absconding with funds, but low enough for startups to get in the door, he said. Teo touched on the same theme at an April conference by Endeavor Vietnam, an impact fund.
“As a region, we’re very fortunate to have regulators that are very forward-looking, to an extent benefiting from China’s missteps,” he told the audience.