Lending

Validus Makes Waves as First Fintech in Singapore’s Enterprise Financing Scheme

Validus, peer-to-peer (P2P) lending platform for SMEs, is Singapore’s first fintech to be approved as a Participating Financial Institution (PFI) under Enterprise Singapore’s Enterprise Financing Scheme.

This is the first time that a fintech has been onboarded under the scheme, alongside local banks and established financial institutions such as DBS, OCBC Bank, United Overseas Bank and Hong Leong Finance.

Under the Enterprise Financing Scheme, Validus will provide working capital solutions to SMEs. The government-assisted financing and risk-sharing schemes are part of the Singapore government’s initiatives to help support the needs of local businesses especially during the pandemic.

These schemes offer up to 90% risk sharing when financing is given to SMEs by the participating financial institutions (which includes Validus now). The PFIs must follow due process as listed and agreed with Enterprise Singapore for the disbursements.

Ajit Raikar

“We understand how access to affordable financing can enable SMEs’ exponential growth, and we are capable of assisting those who are cash-strapped to seek funding. Specifically, in a 2019 study, SMEs supported by Validus in Singapore saw a 17% 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, we’ve witnessed a sustained demand for unsecured loans from viable SMEs not just in Singapore, but across all our markets in the region, looking to prime their business for recovery and growth. We hope that the other countries will also introduce similar government schemes for fintechs and SMEs, where fintechs like Validus can play a conduit role in reaching out to the viable SMEs and offer them growth financing.”

With a huge addressable market in the region, Validus is going full throttle in bridging the SME financing gap. It has seen acceleration in each of its markets in Indonesia, Vietnam and Thailand, helping local businesses increase trade and create employment.

Both Validus Vietnam and Batumbu (Validus’ Indonesian arm) is said to have shown 500% growth in the last four months.

In solidifying its position in Southeast Asia, Siam Validus (Validus’ Thailand arm) is due to launch early next year as a joint venture with one of Thailand’s largest conglomerates who themselves have an SME ecosystem transaction volume of over US$5 billion annually.

In May, Validus raised US$14 million in its ongoing Series B+ funding round led by Vertex Growth with follow-on funding from Vertex Ventures SEA and India.

Featured image: Mr Nikhilesh Goel, co-founder and CEO of Validus