Driving SMEs and economic growth with Validus Vietnam

August 05, 2020 | 09:00
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Leveraging global capabilities and local insights, award-winning and tech-focused financing platform Validus has built a strong business to bridge small business working capital needs and driven financial inclusion of small- and medium-sized enterprises (SMEs) across the region, including in Vietnam.
1503p9 driving smes and economic growth with validus vietnam
Validus Vietnam comprises of a dedicated team rich in experience of SMEs banking

With its young, tech-savvy population and burgeoning emerging market, Vietnam presents a unique reserve of untapped financial services opportunities. According to the International Finance Corporation, SMEs play an essential role in Vietnam’s economy, accounting for 98 per cent of enterprises whilst contributing to 40 per cent of the GDP.

Yet 60 per cent of SMEs have unmet financing needs, with the financing gap estimated at $21 billion. Access to finance is key to the creation, growth, and productivity of SMEs. However, a large number of domestic small businesses lack financial literacy as well as the necessary collateral and credit records to borrow from traditional lenders like banks.

In comes Validus Vietnam, the local arm of Singapore-headquarted Validus Capital (Validus), which boasts distinct advantages of deep understanding of Vietnam, along with extensive expertise and a reputation to bridge the SME financing gap.

Based in Ho Chi Minh City, Validus Vietnam is going full throttle on its journey to connect Vietnamese SMEs to individual and institutional investors for reliable and safe financing. With its innovative financing model, Validus Vietnam is boosting lending to small businesses in key supply chains, deploying a sustainable finance product offering that provides working capital to SMEs in a timely and affordable manner, helping local businesses increase trade and create employment.

“As the largest SME financing platform in Singapore, we understand how access to affordable financing can enable their exponential growth, and we are capable in assisting cash-strapped SMEs to seek funding. Specifically, those supported by Validus in Singapore saw a 17 per cent increase in revenue on average, and supported more than 10,000 jobs,” noted Ajit Raikar, co-founder and executive chairman of Validus. “As the global health crisis continues to inflict hardship on every sector, financing remains critical for SMEs. We’ve witnessed a sustained demand for unsecured loans from viable SMEs looking to prime their business for recovery and growth.”

In Vietnam, Validus has forged key partnerships with corporates to address financing in various sectors, such as with pharmacy group Medicare Vietnam, and Nafoods – a fast-growing agri-food business and manufacturer.

Such partnerships reiterate the firm’s commitment in bridging the financing gap for SMEs and building a more prosperous Vietnam as a part of its customer-centric culture.

Swaroop Shah, CEO of Validus Vietnam told VIR, “In addition to working with credible local corporate partners, Validus Vietnam has a professional and dedicated team with in-depth experience in SMEs banking. This is essential as each market is differentiated – that is why we’ve adopted a ‘glocal’ approach in every country we enter.”

Furthermore, investing in technology has been part of the Singapore-headquartered leading fintech’s strategic focus to offer clients a superior experience. Validus’ digital platform implements cutting-edge credit scoring systems, proven proprietary algorithms and AI catered to fulfil bespoke demands of Vietnam’s SMEs on accessing to fast, reliable, and affordable financing sources.

These technologies help Validus improve its credit scoring and fraud detection capabilities, strengthening the risk mitigation process to safeguard investors’ interests.

“We are committed to delivering our top-notch lending services to meet the working capital needs of Vietnamese SMEs, coupled with the strong governance framework already in place from our Singapore operations,” Shah added. “With easier access to financing options, businesses are able to manage their operational expenses, therefore deepen expertise in their landscape, to thrive and transform locally and globally.”

Backed by big names such as VinaCapital Ventures, Vertex Ventures, and AAA-rated Dutch Development Bank FMO, Validus Capital has a strong growing presence in the region – in Singapore, Indonesia, and Vietnam, with Thailand launching later this year. The award-winning company has facilitated more than $365 million in business financing to-date.

The firm has also garnered a number of prestigious awards, including Best Supply Chain Finance Company Singapore 2020 and Best SME Financing Platform Singapore 2020 at the International Business Magazine Awards; and Best P2P Lending Platform Singapore 2020 by Global Banking & Finance Review.

In May, Validus successfully raised $14 million in its ongoing Series B+ funding round, reflecting its immense potential, growing strength, and huge influence on the region’s financial landscape.

The company looks forward to partnering with more corporations to provide Vietnam’s SMEs access to convenient and affordable sources of growth financing across industries like agriculture, manufacturing, wholesale trade, and healthcare.

“The Vietnamese government is set to polish up mechanisms, policies, and the legal framework in the finance sector, in order to adapt to the Fourth Industrial Revolution. We believe we’re evolving in sync with our clients’ fast-paced, burgeoning needs to accelerate SMEs development in Vietnam,” Shah emphasised.

By Celine Luu

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