Taken from The Daily NNA Japan interview with Milena Naitoh, Head of Group Corporate Development and Capital Markets Division in Validus Investment Holdings Pte, Ltd
Validus Group, a Singapore-based financial technology (Fintech) lending company, facilitates funding for SMEs in Southeast Asia with innovative solutions utilizing artificial intelligence (AI). It has rapidly provided loans to over 65,000 companies, promoting their business expansion.
Validus has focused on closing the credit access gap for small and medium-sized enterprises (SMEs) through partnerships within the supply chain ecosystem, supporting over 65,000 SMEs in Singapore, Indonesia, Thailand, and Vietnam. By leveraging AI, they have streamlined the lending process and improved businesses access to funding. Their solutions include "Invoice Financing" which accelerates delivery cycles, and "PO Financing", which covers costs like staffing and procurement to fulfill orders on time. SMEs can secure working capital within a day with minimal documentation.
Plans for Growth in Indonesia, the Most Thriving Market in Southeast Asia
Validus has rapidly provided over 120,000 loans to small businesses. In the year leading up to August 2024, the loan balance for its Indonesian operations has expanded 2.3 times, maintaining a trend of doubling compared to the previous year. Revenues have also increased by 1.5 times, with profit margins expanding to over 50%. Validus has become the only profitable SME fintech lender in Indonesia.
The company is focusing on both vertical and horizontal expansion. Vertically, it plans to use supply chain data to extend deep-tier financing to lower tiers (from distributors to sub-distributors one tier down, and eventually to sub-distributors two tiers down). Horizontally, it is expanding partnerships with over 100 companies in the consumer goods, retail, and food sectors, which are experiencing strong growth.
Validus also offers a "Vendor Financing Program" designed to strengthen the relationships between buyers and SME vendors by mitigating risks and reducing costs throughout the financing cycle. This helps ensure that suppliers and vendors have the working capital they need, benefiting all parties involved.
Validus’ Footsteps Across Markets and Industries in the Region
The main industries supported by Validus in the four Southeast Asian markets are crucial to the economic growth of each country. Specifically, these include SMEs in manufacturing, agriculture, fast-moving consumer goods and retail, construction and infrastructure, healthcare, education, tourism and hospitality, and IT services.
By country, business is growing steadily, especially in Indonesia and Thailand. In the medium to long term, Validus is also considering entering markets such as the Philippines and Malaysia.
Joint Venture with Industry Leader in Thailand
Siam Cement Group is one of Thailand's leading conglomerates, and the joint venture Siam Validus established with them can receive integrated live data from Siam's supply chain to provide fully automated, pre-approved loans to SMEs. We have become the market leader in Thailand’s digital lending sector, with an estimated market share of over 60%. Moving forward, we plan to deepen our involvement in the Siam Cement Group's supply chain, similar to our approach in Indonesia, promoting financing through data and technology-driven initiatives.
Maximizing the Potential of Singapore’s SMEs
In Singapore, we focus on the underserved small and medium-sized enterprises. Based on our proprietary algorithm, we offer innovative products, such as fully digital working capital loans that can be approved (or rejected) online in under five minutes, with funding executed within as little as 24 hours.
Our portfolio has seen an average annual growth rate of over 50% over the past five years. We are now focusing on expanding this portfolio through digital partnerships. Specifically, we are strengthening our underwriting capacity by partnering with platforms in the food and beverage, construction, and procurement sectors to obtain transaction data, allowing us to provide these platform customers with access to capital.
Validus Approach in the Vietnamese Emerging Family-Owned Businesses
Similar to Singapore, we are focusing on providing micro-loans to family businesses in Vietnam through partnerships with digital platforms that present significant business opportunities.
Our current partners include companies operating platforms for e-commerce management, point-of-sale (POS) systems using debit cards, taxation, invoicing, and procurement. Validus is based in Ho Chi Minh City, where the majority of our customers are located.