Shares in Afterpay, the buy-now-pay-later ASX-listed fintech, fell hard after it was swept up in a Senate inquiry into financial services not covered by the banking royal commission.

A short time ago, the shares were down more than 18% to $11.39.

Afterpay last month closed an oversubscribed equity raise for $25 million at $16.96 a share.

The Senate inquiry is expected to look at payday lenders, consumer leasing businesses, and companies such as Afterpay offering consumer finance for retail spending.

The inquiry is being put up by the Labor Opposition, and is supported by the Greens and Key crossbenchers whose numbers will ensure it will get through the Senate.

The corporate regulator ASIC also is looking at buy now pay later industry lenders, including Afterpay and Zip pay, and whether new regulations are needed to protect costumers.

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