Nikhilesh Goel – Validus Cofounder and Group CEO
Validus, a Singapore-headquartered digital SME lending platform, has partnered with global banking giant HSBC to raise up to US$50 million in debt facility.
The capital will be deployed through Validus’s Indonesian subsidiary, Batumbu, to support local MSMEs and address the country’s financing gap.
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Batumbu claims to have seen growing profits over two years and consistently achieved EBITDA margins exceeding 50 per cent.
According to a press release from Indonesia’s Ministry For Economic Affairs, there are currently 64.2 million MSMEs that contribute 61 per cent of the country’s GDP, absorbing 97 per cent of the total workforce in the country.
A World Bank report highlights that Indonesian MSMEs face major challenges in securing financing due to the stringent requirements imposed by banks. Despite various government initiatives, MSME loans account for only about 20 per cent of total bank loans.
The International Finance Corporation estimates that MSMEs’ financing gap is approximately US$234 billion.
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.”
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 uses data analytics and AI to drive growth financing for the underserved SME sector via funds from individual and institutional investors. It holds a Capital Markets Services Licence from the Monetary Authority of Singapore (MAS) and has also received regulatory approval in Indonesia (OJK) and Thailand (SEC and BOT).
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Validus also has a presence in Vietnam (Validus Vietnam) and Thailand (Siam Validus)
Since 2021, Validus claims to have quintupled its total funds disbursed, reaching S$5.17 billion. The company is backed by investors, including Vertex Ventures Southeast Asia and India, Vertex Growth, FMO, 01Fintech, NongHyup Financial Group, Norinchukin Bank, Aizawa Asset Management, Lotte F&L, AddVentures by SCG, VinaCapital Ventures, SEA Frontier Fund, K3 Ventures, and Openspace Ventures.
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Image Credit: Validus.
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