VALIDUS Capital, a P2P (peer-to-peer) lending platform for small and medium-sized enterprises (SMEs), has expanded into Vietnam as its third South-east Asian market, it announced on Wednesday.
SMEs make up 97 per cent of Vietnam's enterprises, but only account for 22 per cent of total bank lending. To meet a US$21 billion SME financing gap in the country, Validus Vietnam will partner corporates to provide SME growth financing to their vendors and subcontractors.
The pilot programmes it has in the pipeline include partnerships with Medicare Vietnam, the largest pharmacy, health, beauty and personal care retail group in the country; and Unicons, a member of Coteccons Group which is one of the leading private construction enterprises there.
The Validus Vietnam team is led by Validus co-founder Nikhilesh Goel and comprises locals with experience in financial services, retail and commercial banking in the country. It will operate using the same proprietary technology and credit scoring systems that the company uses in Singapore and Indonesia, and tailor them to suit the unique needs of the local SMEs.
"Helping our SMEs to grow will be crucial for Vietnam's continued rise as a South-east Asian economy," said Validus Vietnam's chief business officer Tran Thi Thuy Ha.
Having operated successfully in Singapore's highly regulated financial services environment, Validus will bring this same compliance and technical rigour to Vietnam's rapidly growing SME financing space, she added.
According to a recent study of Singapore SMEs and the economy in 2018 commissioned by Validus, Validus-supported SMEs increased their annual revenue by an average of 17 per cent and contributed US$300 million to Singapore's gross domestic product.
Validus aims to replicate its success in Singapore to address the domestic unmet financing gap in the rest of South-east Asia. In 2016, McKinsey estimated this gap to be US$175 billion.
Said Trung Hoang, deputy managing director at Validus shareholder VinaCapital - a Vietnamese investment manager: "Validus' data-driven platform leverages artificial intelligence and machine-learning to facilitate accessible and affordable business financing for SMEs. 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 SMEs across the region."
The Business Times reported earlier this week that Validus is understood to be in firm talks with Keppel Corporation, OCBC Bank and Vertex Ventures to form a digital-bank consortium. The group is understood to be looking to obtain one of three wholesale digital banking licences offered by the Monetary Authority of Singapore.