No more fishy loans after eFishery rout

IN FOCUS

In today’s newsletter, we look at:

• The eFishery fiasco’s effects on startup loans
• EToro’s bullish IPO path

Welcome to The Top Up! Delivered every fortnight via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and trends in fintech. Get it in your email inbox by registering here.

Hey,

My wife and I have started exploring home loan options, and we’re already overwhelmed with things to keep in mind: loan terms, interest rates, closing costs, penalties, and more.

On the other side of the coin, lenders collect large amounts of data from countless loan seekers. Processing all this data can be a nightmare, I imagine.

For startup loans, this process might be exacerbated by the eFishery fiasco. As my colleague Jofie notes in this week’s featured story, the scandal involving the Indonesian aquaculture company might prompt banks to be more cautious when lending cash to startups.

These new players often lack not only a track record but also hard collateral and stable cash flows. As such, they typically don’t borrow from most major banks. Unfortunately, what’s happened at eFishery might make life harder for these firms.

But since banks can still benefit from serving these companies, the relationship between them won’t be completely broken. Check out Jofie’s story to find out more.

Meanwhile, in this edition’s Hot Take, I look into the investment and trading platform eToro’s bullish run and what aspects of its business Southeast Asian firms may follow.

— Miguel

THE BIG STORY

EFishery’s woes push banks to rethink startup loans

Image credit: Timmy Loen

The aquatech firm’s fall is exactly what risk-averse banks fear. But it may not turn them off startups – for now.

THE HOT TAKE

Stop wasting time on fleeting connections