Validus Capital, a Singapore based financing platform that specializes in peer-to-peer lending, has launched Validus Vietnam, which will be the company’s third market in Southeast Asian. The company launched in Singapore in 2015, and expanded into Indonesia with its “Batumbu platform” in May 2019.
Validus Vietnam wants to meet the financing gap for Small and Medium Enterprises (SME’s) in Vietnam and believes this is a $21 billion USD market.
Validus Vietnam plans to undertake a market development strategy that entails partnering with corporations across a variety of industries to provide financing to their vendors and subcontractors. Some of the industries that Validus plans to work with include construction, consumer services, healthcare, manufacturing, real estate, retail and wholesale trade.
Validus Vietnam will partner with corporations to provide SME growth financing to their vendors and subcontractors. The company says that it already has several pilot programs with partners in development including programs with Medicare Vietnam, the largest pharmacy, health, beauty and personal care retail group in Vietnam; and Unicons, a member of Coteccons Group, one of the leading private construction enterprises in Vietnam.
Validus Vietnam will provide Vietnam’s SME’s access to fast, reliable and affordable sources of growth financing and will use credit scoring algorithms and other technology systems that the company uses in Singapore and Indonesia to determine the amounts of capital that the company can lend to individual SME’s.
Nikhilesh Goel, the Co-Founder of Validus in Singapore, will lead Vietnam operations. Goel has more than 14 years’ of experience in debt and equity financing, portfolio management and the development of local teams.
A study that was commissioned by Validus Singapore shows the impact of the company’s financing activities in Singapore on SME’s and the economy. In 2018 Validus-supported SME’s increased their annual revenue by 17% on average, contributed USD$300 million USD to Singapore’s GDP and supported 10,000+ jobs. Validus Vietnam says that it hopes to replicate this same positive social impact in Vietnam by addressing the unmet financing gap for domestic SME’s.
According to a report by McKinsey in 2016, the SME financing gap in Southeast Asia was estimated to be $175 billion USD. The McKinsey report noted that in 2016 Vietnamese SME’s accounted for 97$ the total enterprises in the country, but only 22% of total bank loans went to them.
Trung Hoang, Deputy Managing Director at VinaCapital, which has invested in Validus said,
that the company is well-positioned to help accelerate financial inclusion among the unbanked and underserved SME market in Vietnam and that, “Validus’ data-driven platform leverages artificial intelligence and machine-learning to facilitate accessible and affordable business financing for SME’s.”
He added that, “Their impressive track record as a fast-growing fintech company and the impact that they’ve delivered to date is testament to their commitment and ability to successfully drive inclusive growth for SME’s across the region.”