Validus, a digital SME financing platform with its headquarters in Singapore, has teamed up with international banking behemoth HSBC to raise a debt facility of up to US$50 million.
The funds will be used to close the funding gap in the nation and assist regional MSMEs through Validus’s Indonesian affiliate, Batumbu.
Over the course of two years, Batumbu claims to have observed growing earnings and routinely generated EBITDA margins over fifty percent.
As per the news release issued by Indonesia’s Ministry of Economic Affairs, the country presently has 64.2 million MSMEs, which account for 61% of the GDP and employ 97% of the labor force.
Validus co-founder and Group CEO Nikhilesh Goel, said: “This long-term partnership with HSBC builds on our ongoing efforts to bridge the financing gap for MSMEs in Indonesia. We will continue to pioneer innovations and drive advancements in the lending space.”
According to a World Bank assessment, the strict conditions put in place by banks make it extremely difficult for MSMEs in Indonesia to secure funding. Notwithstanding numerous government measures, just 20% of all bank loans are made up of MSME loans.
Read also- Abu Dhabi-Based Hulexo has Secured Undisclosed Amount in Seed Round Funding
The financing shortfall for MSMEs is estimated by the International Finance Corporation to be over US$234 billion.
Harish Venkatesan, Head of Corporate and Business Banking at HSBC Singapore, added: “MSMEs play a key role contributing to the long-term economic success in the ASEAN region and beyond. We look forward to supporting Validus in its mission to drive regional growth through the HSBC ASEAN growth fund.”
Founded in 2015, Validus leverages funds from private and institutional investors to accelerate growth finance for the neglected SME sector through data analytics and artificial intelligence. The Monetary Authority of Singapore (MAS) has granted it a Capital Markets Services License, and it has also obtained regulatory permission in Thailand (SEC and BOT) and Indonesia (OJK).
Read also- Jordan-Based TVSDC Signs Partnership Agreement with Joramco
Validus states that since 2021, the amount of money it has distributed has quadrupled to S$5.17 billion. Investors such as VinaCapital Ventures, SEA Frontier Fund, AddVentures by SCG, FMO, 01Fintech, NongHyup Financial Group, Norinchukin Bank, Aizawa Asset Management, Lotte F&L, Vertex Ventures Southeast Asia and India, Vertex Growth, and Openspace Ventures support the company.
About Validus
Validus is Southeast Asia’s top all-in-one SME financing platform. Validus uses data and AI to provide growth funding to underserved SMEs, resulting in faster and easier one-stop financial solutions that boost productivity and cost reductions. Validus provides loans, business accounts, corporate cards, payments, and cost management to SMEs. Validus has lent over USD 2 billion to Southeast Asian small enterprises.
