Webinar Series 2020-2021: Financial Transformation, Credit Markets and Household Debt in Southeast Asia

About the Webinar Series

This webinar series explores the transformation of financial landscapes in Southeast Asia. Within the last two decades, most of the ASEAN countries have experienced an economic boom and become more integrated with global capital markets. Financial inclusion has also significantly improved even though it remains relatively low in some countries. An important aspect of this financial transformation is the development of traditional and digital credit markets in a context where informal finance remains well-entrenched. Another key component is the rise of household debt driven by the consolidation of a young and aspirational middle-class. Regulating the new financial landscapes and managing household credit booms are critical to ensure financial stability and balancing the benefits of consumer lending with the risks of overheating. The webinar will address these pressing issues by shedding light on household debt and the evolution of formal and informal credit markets including consumer lending, digital finance, credit cards, microfinance, saving groups, moneylending. It will also explore new technologies that facilitate fintech development including big data-based credit scoring.

Three sessions will be co-organized with the Centre for Banking & Finance Law, National University of Singapore.

Coordinator: Nicolas Lainez (nicolas_jose_lainez@iseas.edu.sg)

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Registration

This webinar series will be delivered online entirely. You can join the webinars at the specified date and time using devices (computer, phone, or tablet) with internet connection.

Please register for each session to receive your unique link for joining the webinars. Limited spaces only, register early to avoid disappointment.

To join the webinar,

1. Install the Zoom client onto your computer or download the app on your mobile device.
2. Set up a Zoom account, using the following link: https://zoom.us/signup
3. Click on the unique link in your email.

For the best experience, please mute your microphone. If you have questions for the speakers, please key in your questions via the Q&A feature, stating your name and affiliation. The moderator will field them to the speakers during the Q&A session.

7 September 2020 (4.00 pm – 5.15 pm)
Microfinance in Cambodia: ‘Building-back-better’ in the Post-Covid19 Era
Speaker: Dr Milford Bateman
Discussant: Dr W Nathan Green
Read the event highlight here.

14 October 2020 (10.30 am – 11.45 am)
Myanmar’s Mobile Finance Revolution? Disruption and Promise
Speaker: Dr Sean Turnell
Read the event highlight here.

5 November 2020 (4.00 pm – 5.15 pm) (co-organized with CBFL)
The Challenges of Low-Income Debt and Moneylending in Singapore
Speaker: Dr Jodi Gardner
Discussant: Dr Sandra Booysen
Read the event highlight here.

17 December 2020 (4.00 pm – 5.15 pm)
Does a New Informal Credit Arrangement Improve Poor’s Welfare? The Case of Debit Card
Speakers: Dr Kei Kajisa and Mr Eduardo Lucio
Discussant: Dr Nina Anchugina
Read the event highlight here.

14 January 2021 (4.00 pm – 5.15 pm)
Savings and Credit in Rural Lao PDR: With a Focus on the Village-level Savings Groups
Speaker: Dr Koichi Fujita
Discussants: Prof Hans Dieter Seibel, Dr Akihiko Ohno, Dr Chansathith Chaleunsinh
Read the event highlight here.

15 February 2021 (4.00 pm – 5.15 pm) (co-organized with CBFL)
Understanding People’s Use of Digital Lending in Indonesia
Speaker: Dr Johan Irni Rahmayan
Discussant: Manggi Taruna Habir
Read the event highlight here.

8 March 2021 (4.00 pm – 5.15 pm)
The Prospects and Dangers of Algorithmic Credit Scoring in Vietnam: Regulating a Legal Blindspot
Speaker: Dr Nicolas Lainez
Discussants: Prof Elliott Ash, Mr Eric H.Y. Koh, Ms Dang Linh Chi
Read the event highlight here.

15 March 2021 (4.00 pm – 5.15 pm)
Exploring Differences in Rural Household Debt between Thailand and Vietnam: Economic Environment versus Household Characteristics
Speaker: Dr Bezawit Beyene Chichaibelu, Prof Hermann Waibel
Discussants: Dr Hao Quach, Dr Attasuda Lerskullawat
Read the event highlight here.

1 April 2021 (4.00 pm – 5.15 pm)
Drivers of Ar-Rahnu (Pawn) Acceptance: Malaysian Evidence
Speaker: Dr Hassanudin Mohd Thas Thaker
Discussant: Dr Muhammad Rizky Prima Sakti
Read the event highlight here.

12 April 2021 (4.00 pm – 5.15 pm)
The Impacts of Financial Inclusion: From a global review of reviews, what can we know about Southeast Asia?
Speaker: Dr Philip Mader 
Discussant: Dr Melissa Johnston
Read the event highlight here.

3 May 2021 (4.00 pm – 5.15 pm)
Regulating Over-indebtedness: Local State Power in Cambodia’s Microfinance Market
Speaker: Dr W. Nathan Green
Discussant: Dr Isabelle Guérin
Read the event highlight here.

18 May 2021 (2.00 pm – 3.15 pm)
Digital Finance and Regulatory Landscape: Malaysian Experience
Speaker: Dr Nafis Alam
Discussant: Mr Allen Sng Kiat Peng
Read the event highlight here.

3 June 2021 (4.00 pm – 5.15 pm)
Filling the voids left by the Formal Sector: Informal Borrowings by Poor Households in Northern Mountainous Vietnam
Speaker: Prof Pham Bao Duong
Discussant: Prof Koichi Fujita
Read the event highlight here.

15 June 2021 (4.00 pm – 5.15 pm)
Frontier finance: The role of microfinance in debt and violence in post-conflict Timor-Leste
Speaker: Dr Melissa Johnston
Discussant: Dr Isabelle Guérin
Read the event highlight here.

28 June 2021 (4.00 pm – 5.15 pm)
Consumer Finance and Credit Risk in Vietnam: Shifting Uncertainty to Family and Social Networks
Speakers: Dr Nicolas Lainez, Mr Trinh Phan Khanh, Ms Bui Thi Thu Doai
Discussants: Dr Hao Quach, Dr Tom McDonald
Read the event highlight here.

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Microfinance in Cambodia: ‘Building-back-better’ in the Post-Covid19 Era

Monday, 7 September 2020
Singapore time, 4pm

Read the event highlight here.

At the end of 2019 Cambodia possessed the most world’s most profitable and largest (on a per capita basis) microfinance sector. Yet, at the very same time, it was being described by leading advocates as in ‘an existential crisis’ thanks to a history of reckless lending, unsustainable growth, and egregious profiteering. In a matter of weeks in 2020, however, this systemic crisis was forgotten thanks to the global Covid-19 crisis. On the largely false pretext that the microfinance sector provides Cambodia’s poor with a pathway out of poverty, the Cambodian government and the international development community are rushing to construct a bail-out program that will keep the current largely foreign investor-owned microfinance sector alive. This lecture will argue that this is entirely the wrong approach to take. Not least because the world’s largest microfinance market has to date seriously undermined the lives of Cambodia’s poor, this will mainly benefit the narrow elite that manages, owns, invests in and advises the microfinance sector. I propose instead a Rooseveltian approach to local finance based on use of scarce financial resources to help create a radically new community-owned and controlled financial system that is genuinely pro-poor and developmental while usefully extending democratic practices.

Download the webinar notice here.

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Myanmar’s Mobile Finance Revolution? Disruption and Promise

Wednesday, 14 October 2020
Singapore time, 10.30 am – 11.45 am

Read the event highlight here.

The rise of mobile phone-based financial services brings with it the promise of economic inclusion on an unprecedented scale. This is especially true in countries, such as Myanmar, where banking and finance have historically been the vehicles for monopoly rents, and the systemic core of a political economy of restricted access and control. Mobile financial services, partly as delivered and fairly as extrapolated, offer the channels for the aggregation and allocation of capital, the smoothing of consumption, and the potential basis both for the regularisation of economic life, and some protection against its vicissitudes. This paper explores the beginnings of mobile financial services in Myanmar, their dramatic expansion since the country’s (albeit, incomplete) political transformation, the state of play of the sector, and the issues and obstacles it faces. The paper concludes by exploring future extensions and possibilities of what beckons as a genuine revolution in Myanmar’s financial and economic affairs.

Download the webinar notice here.

The Speaker

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The Challenges of Low-Income Debt and Moneylending in Singapore

Thursday, 5 November 2020 (event co-organized with CBFL/NUS)
Singapore time, 4.00 pm – 5.15 pm

Read the event highlight here.

Singapore is a land of contrasts and, at times, of inequality. These issues were highlighted in Oxfam’s ‘The Commitment to Reducing Inequality Index 2018’, where Singapore was in the bottom 10 countries in terms of reducing inequality, being ranked 149 in an index of 157 countries. The government has responded proactively to these challenges by enacting a number of reforms to address the increasing inequality in the country. Equality in the financial market is one area that is particularly worthy of attention. Singapore is a world leader in banking and a financial hub, yet many of its citizens rely on moneylending as their main source of credit. Despite the government interest and activity in the area, there is surprisingly little academic research on low-income debt, moneylending and the impact it has on borrowers. This presentation will consider a range of relevant issues including moneylending regulation, bankruptcy reforms and open banking, highlighting what further steps can be taken to increase equality in Singapore’s financial market.

Download the webinar notice here. (updated 28 September)

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Does a New Informal Credit Arrangement Improve Poor’s Welfare? The Case of Debit Card Pawning in the Philippines

Thursday, 17 December 2020
Singapore time, 4.00 pm – 5.15 pm

Read the event highlight here.

This presentation focuses on a recent example of a new credit arrangement in the Philippines’ informal finance sector: an emerging credit arrangement called “ATM sangla (pawning),” literally meaning debit card pawning. ATM sangla is an informal loan arrangement where the borrower’s ATM (debit) card is used as the collateral, where the lender uses the card to withdraw the repayment (principal and interest) from salary deposits on every payday until the entire amount is repaid. Using our unique survey data of factory workers in an industrial estate near the Metro Manila area, we find that slightly less than half (42%) of our respondents actually utilized ATM sangla at least once, with the average loan amounting to the average monthly salary. We find that roughly one-third of our respondents are present-biased discounters (myopic individuals), where they tend to hold higher loan balances with ATM sangla transactions than those whose preferences are time-consistent. Our results show that the present-biased discounters are naïve, rather than sophisticated, suggesting that the emergence of ATM sangla may have encouraged them to overborrow to finance luxury expenses. This presentation is based on a paper is co-authored with Nobuhiko Fuwa (University of Tokyo), Eduardo Lucio (University of Queensland), Sharon Faye Piza (World Bank), and Yasuyuki Sawada (Asian Development Bank). 

Download the webinar notice here. (updated 25 November 2020)

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Savings and Credit in Rural Lao PDR: With a Focus on the Village-level Savings Groups

Thursday, 14 January 2021
Singapore time, 4.00 pm – 5.15 pm

Read the event highlight here.

Since the late 1990s village-level savings groups (SGs) were organized in Laos by a joint venture of NGOs (from Thailand) and Lao Women’s Union, starting from villages in Vientiane Municipality and expanded to more remote rural areas. The Agricultural Promotion Bank (APB), established in 1993, has a nation-wide branch network but a limited capacity to deliver credit to farmers. Given the still largely subsistence-oriented but rapidly transforming to market-based economy in rural Laos, the presentation reports the current status and structure of rural financial market, which is comprised of informal, formal (mainly APB), and the newly emerged SGs, based on intensive fieldwork conducted in several villages in Vientiane Municipality and Luang Prabang Province.

Download the webinar notice here. (updated 13 Jan 2021)

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Understanding People’s Use of Digital Lending in Indonesia

Monday, 15 February 2021 (event co-organized with CBFL/NUS)
Singapore time, 4.00 pm – 5.15 pm

Read the event highlight here.

As the fourth most populous country in the world, and with an internet participation ratio of more than 50%, Indonesia shows huge potential for financial technology (fintech). However, the penetration of financialisation has brought many challenges. In Indonesia, the increase of household debt is partly supported by the rapid growth of information technology-based lending. For some people, the easier access to credit that is offered might be one opportunity. However, it raises new risks as well, such as being burdened by debt or worsening their financial condition, especially if they choose an unsecured loan. Government policies have become very important as a result. Strengthening regulation in the financial services sector is very important to reduce the complexity and fraud. Alongside with this, living in a more financialised world means that we need a better understanding of finance. Financial capability plays an important role because it supports a greater understanding of financial management and protects people from fraud and unnecessary financial risks. Given that over-indebtedness could risk the country into financial vulnerability, this presentation will discuss a range of relevant issues related to the use of fintech and financial capability in Indonesia, with the focuses on household debt sourced from online loans. It will also highlight the efforts and regulation of financial services made by the government in ensuring good market conduct and enhancing consumer protection.

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The Prospects and Dangers of Algorithmic Credit Scoring in Vietnam: Regulating a Legal Blindspot

Monday, 8 March 2021
Singapore time, 4.00 pm – 5.15 pm

Read the event highlight here.

Artificial intelligence (AI) and big data are transforming the credit market in Vietnam. Lenders increasingly use algorithmic credit scoring to assess borrowers’ creditworthiness or their likelihood and willingness to repay a loan. This technology gleans non-traditional data from smartphones and analyses them through machine learning algorithms. Algorithmic credit scoring promises greater efficiency, accuracy, cost-effectiveness, and speed in predicting credit risk compared to traditional credit scoring systems that are based on economic data and human discretion. These technological gains are expected to foster financial inclusion, enter untapped credit markets, and deliver credit to ‘at-risk’ and financially excluded borrowers. However, this technology also raises public concerns about opacity, unfair discrimination, and threats over individual privacy and autonomy. In Vietnam, the lending industry deploys this technology at scale but in legal limbo. Regulation is vital to delivering big data and AI promises in the financial services market while ensuring fairness and public interest.

A working paper will lay the foundation for this webinar. It can be accessed here.

Download the webinar notice here. – Updated 15 Feb 2021

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Exploring Differences in Rural Household Debt between Thailand and Vietnam: Economic Environment versus Household Characteristics

Monday, 15 March 2021
Singapore time, 4.00 pm – 5.15 pm

Read the event highlight here.

Rural financial markets have grown rapidly in Asian emerging market economies, thus contributing to economic development and the reduction of poverty. At the same time, however, the level of indebtedness of rural households has increased, making households more vulnerable to shocks. This study aims to explore cross-country differences in credit market participation, level of household debt holding and over-indebtedness between rural households in Thailand and Vietnam. Using a unique rural household survey data from “Vulnerability in Southeast Asia” project, it first identifies socio-economic determinants of such market outcomes for rural households in Thailand and Vietnam. It decomposes differences into a part that arise due to configuration of household characteristics or a part that arise due to differences in economic environments using three decomposition methods. Significant differences are observed in credit market participation rates and level of debt holding and indebtedness between rural households in Thailand and Vietnam which are mainly explained by differences in credit market conditions between the two countries.

Download the webinar notice here. – Updated 15 Feb 2021

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Drivers of Ar-Rahnu (Pawn) Acceptance: Malaysian Evidence

Thursday, 1 April 2021
Singapore time, 4.00 pm – 5.15 pm

Read the event highlight here.

The purpose of this paper is to examine the factor persuading the acceptance of Islamic pawn broking (Ar-Rahnu) among Islamic bank customers. We collected the data using a self-administered questionnaire design and analysed using SPSS Statistics and smart partial least square. The study is restricted to only respondents who are based in the area of Klang Valley (Selangor and Kuala Lumpur), as these two areas have a larger number of Islamic banks and a decent number of Islamic banks’ clients. The constructs involved for analysis purpose are affect, social factor, facilitating conditions, perceived financial benefits and perceived risk constructs. The finding suggests a significant positive association for social factor and perceived risk, while negative association learnt for affect on acceptance of Ar-Rahnu financing. Furthermore, the facilitating condition and perceived financial benefit are found insignificantly related. The findings from this study are expected to enrich the literature on the body of knowledge, as it has served to broaden the understanding of the Ar-Rahnu (pawn) acceptance level in Malaysia. Moreover, the findings of this study will be very helpful for the Islamic financial institutions to find the best way to retain Ar-Rahnu clients and encourage more client to choose Ar-Rahnu as a mode of financing. This study owns greater potential to assist Islamic financial institutions to discover the best techniques to retain and encourage the grander number of clients for Ar-Rahnu as a mode of financing.

(the paper is co-authored by Ahmad Khaliq, Mohamed Asmy Mohd Thas Thaker, Anwar Allah Pitchay, and K. Chandra Sakaran)

Download the webinar notice here.

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The Impacts of Financial Inclusion: From a global review of reviews, what can we know about Southeast Asia?

Monday, 12 April 2021
Singapore time, 4.00 pm – 5.15 pm

Read the event highlight here.

The financial inclusion of low-income people is promoted by development institutions, governments and private sector actors as a driver of poverty alleviation, welfare enhancement, macroeconomic transformation, and various other positive effects. But what do we really know about the impacts of the extension of financial services, globally and in Southeast Asia? This presentation will deliver and contextualise the findings of a first-of-its-kind study in international development, a systematic Review of Reviews of the impacts of financial inclusion in low- and middle-income countries. By reviewing the meta-level evidence using a theory-informed framework, and disaggregating its economic, social, gender and behavioural outcomes, we reveal that the impacts of financial inclusion are more likely to be positive than negative, but also that these effects are highly variable and appear not to be transformative in scope or scale, as they largely occur in the early stages of the causal chain. The most clearly positive effects come from savings services, which are relatively under-promoted. The presentation will clarify the implications of these findings for financial inclusion in Southeast Asia.

Download the webinar notice here. – Updated 15 Feb 2021

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Regulating Over-indebtedness: Local State Power in Cambodia’s Microfinance Market

Monday, 3 May 2021
Singapore time, 4.00 pm – 5.15 pm

Read the event highlight here.

Cambodian microfinance borrowers are suffering from an over-indebtedness crisis, which has been exacerbated by the Covid-19 pandemic. Over the past 20 years, the Cambodian government has implemented financial reforms that have commercialized the microfinance sector and promoted industry self-regulation. Echoing long-standing concerns about neoliberal microfinance, critics maintain that these reforms have hollowed out the Cambodian state’s ability to regulate a highly competitive market, thereby exacerbating the problem of over-indebtedness. In contrast, based upon ethnographic research in southern Cambodia, I argue that the microfinance market would not function without local authorities performing key regulatory roles of the state. These local authorities include commune councillors — elected representatives of multiple villages — who work closely with village leaders and local police. They are the primary state actors who enforce the property rights and loan contracts upon which Cambodia’s microfinance market depends. I discuss how this local state regulation contributes to household indebtedness by encouraging multiple borrowing, rural out-migration and land repossession. The presentation contributes to development studies scholarship on over-indebtedness by demonstrating that the inequitable outcomes of commercial microfinance can be better understood, and contested, by interrogating the multi-scalar spaces of state regulatory power.

Download the webinar notice here. – updated 19 April 2021

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Digital Finance and Regulatory Landscape: Malaysian Experience

Tuesday, 18 May 2021
Singapore time, 2.00 pm – 3.15 pm
(Webinar will be held at 2.00 pm instead of 4.00 pm)

Read the event highlight here.

Financial Technology (FinTech) has emerged as a disruptive force in the financial services (Finserv) industry. There is a need for an effective regulatory perimeter to include expanded Finserv ecosystem to have a quicker maturity and wide accessibility of FinTech platforms. Regulators across the globe are making sure that Digital Finance is not bypassing existing regulations and at the same time implementing new regulations to cover the scope of digital finance and FinTech providers. Malaysian Central Bank and Capital Market regulator is no different in this approach. This webinar will share the development of Digital finance, FinTech regulatory development in Malaysia and how it might be relevant within South East Asia.

Download the webinar notice here. – Updated 10 May 2021

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Filling the Voids Left by the Formal Sector: Informal Borrowings by Poor Households in Northern Mountainous Vietnam

Thursday, 3 June 2021
Singapore time, 4.00 pm – 5.15 pm

Read the event highlight here.

When poor households cannot or do not fully access formal credits, informal credits become important to supplement funds for households’ production and consumption. Using mainly primary data derived from a survey of 400 poor households, this study aims to examine the current accessibility, loan purposes and effects of informal credits on poor households in Thai Nguyen province, Vietnam. The results show that there is a considerably high proportion of informal borrowing from relatives, neighbouring villagers, professional moneylenders, rotating saving and credit groups, trade credits and mortgages. Labour force ratio, social capital and residential land areas are the key determinants of poor households’ informal borrowings. The purposes of borrowing are diverse. The informal loans also have certain significant effects on poverty reduction and the welfare of poor households. Rural finance in Vietnam has progressed well; however, both the formal and informal financial sectors need to put in further effort in order to better serve poor clients.

Download the webinar notice here. – Updated 15 Feb 2021

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Frontier finance: The role of microfinance in debt and violence in post-conflict Timor-Leste

Tuesday, 15 June 2021
Singapore time, 4.00 pm – 5.15 pm

Read the event highlight here.

Microfinance has been present for decades in Southeast Asia, but the specific case of Timor-Leste is not well known. The presentation describes the roll out of microfinance in Timor-Leste during the Indonesian Occupation (1978- 1998), and its consolidation during the post-conflict period (1999-2015). Taking a feminist political economy approach reveals how microfinance engendered debt allows for the control, extraction, and accumulation of profits and resources by an elite class and exacerbates gender-based violence. Timorese elite classes have benefitted from microfinance during the Indonesian occupation and in today’s post-conflict regime. Extractive debt relations between elite classes and ordinary citizens are enabled by a gender order that is regulated by brideprice (payment to the bride’s family) and characterized by gendered circuits of violence. Brideprice weds the exchange of women to the class system in which the (violent) control of women is paramount to retaining political power. Microfinance adds liquidity and high interest rates to the debt relations of brideprice helping to create the very conditions for poor women’s disempowerrment in a fragile state. Thus, the success of microfinance is predicated on systems of gender inequality and gendered circuits of violence, debt, and the exchange of women.

Download the webinar notice here. – Updated 15 Feb 2021

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Consumer Finance and Credit Risk in Vietnam: Shifting Uncertainty to Family and Social Networks

Monday, 28 June 2021
Singapore time, 4.00 pm – 5.15 pm

Read the event highlight here.

This webinar examines how consumer finance draws on family and social networks to reduce the uncertainty inherent to credit transactions in Vietnam, which cannot be calculated through credit scoring methods. While virtually non-existent a decade ago, consumer finance is thriving in Vietnam, a country where 60 percent of the population is un(der)banked and lacks credit history. To transform uncertainty into calculable credit risk, decrease exposure to bad debt, maximize profit, and determine loan eligibility and pricing, Vietnamese lenders apply standardized traditional and AI-based credit scoring methods against a backdrop of credit automation, digitalization, and depersonalization. Despite recent progress in calculating credit risk, lenders still lack intimate knowledge about borrowers, a major disadvantage for boosting popular products such as unsecured cash loans. Lenders overcome this limitation by shifting uncertainty onto family, social and professional networks, especially by incorporating borrowers’ relatives, friends and employers into credit transactions as informal guarantors, spies, collectors, and co-debtors. This process becomes particularly apparent in collection practices targeting borrowers’ social relations that are not legally liable. This financialization of familial and social networks is facilitated by the encroachment of family finance in daily life. This webinar is based on unique empirical evidence, consisting of in-depth interviews with 40 low-income borrowers and ten representatives from banks and financial companies including debt collectors, conducted in Ho Chi Minh City in 2019 and Hanoi and Ho Chi Minh City in 2021.

Download the webinar notice here.