HONG KONG/MUMBAI/SINGAPORE (Reuters) – The spring started out rosy for the Indian arm of ClearScore, a company that offers online credit scores and loans.
FILE PHOTO: A general view of Mumbai’s central financial district, India June 13, 2017. REUTERS/Danish Siddiqui/File Photo
Within weeks, the coronavirus pandemic had taken hold, drastically changing the picture for the online lending industry in Asia.
“In the second week of March, we were talking about what a great quarter it would be and a month later I had to let go of the team,” said Hrushikesh Mehta, country manager for India at ClearScore.
The UK-based company shuttered its India business on April 13, as 10 out of 14 lending partners withdrew their products within three days of the launch of a nationwide lockdown.
Alternative lending companies and platforms across Asia are scrambling to raise funds and stave off bankruptcy as they face a wave of bad loans.
Sixteen lenders and investors in markets across Asia Pacific said companies were laying off staff and cutting costs to survive.
Online lending had been one of the hottest sectors in recent years, as new players bet that a digital approach meant they could lend profitably to entities that banks found too costly or bothersome.
Asian online lenders raised more than $4 billion in 2017 and 2018, with Indian and Indonesian companies most prominent, according to data provider Tracxn.
In India there are nearly 500 online lending sta