Singapore's SME Financing Platform Validus Capital Applying for Digital Banking Licence

Validus Capital’s new office at OUE Downtown 2, Singapore
Validus Capital’s new office at OUE Downtown 2, Singapore

Singapore's leading small and medium-sized enterprises (SMEs) financing platform Validus Capital (Validus) has announced that it is applying for a digital banking licence with the Monetary Authority of Singapore (MAS) when applications open, to help meet the unmet financing needs of SMEs. This follows MAS' recent announcement to offer five digital banking licences.

Validus is determined to be Singapore's first digital bank to tackle unmet financing gap faced by SMEs in Singapore and empower Singapore's economy; an issue that affects the SME growth with the McKinsey Global Institute reporting that 39 million Southeast Asian SMEs
(or 51 per cent) lack access to credit.

As part of the application, Validus is looking to collaborate with strategic partners who share the same synergy in creating strong governance and complements Validus' data and technology strengths in SME financing. With the licence, Validus intends to expand its product offering beyond lending, including but not limited to, deposits, payments, remittances and forex (FX).

Supported by Singapore's Vertex Ventures and Dutch development bank FMO, Validus brings together accredited individual and institutional lenders and SMEs. For the last four years, Validus has facilitated over 5,000 loan facilities, amounting to nearly S$250 million (US$184.4 million) in growth financing to Singapore's SMEs without needing to pledge hard collateral. Since 2015, Validus has disbursed an average of S$20 million (US$14.8 million) per month and has brought down the financing costs for SMEs by almost 80 percent as compared to alternative sources. Companies that have benefited from this saw almost 20 per cent growth on average and were able to reach out to new markets with accessible and timely funds.

"Validus believes in driving digital innovation in Singapore and welcomes the opening up of Singapore's banking system through these digital banking licences. It is a natural progression for us to apply for a digital banking licence, that will enable us to expand on our suite of services to help SMEs in Singapore grow. Since 2015, Validus has been working with local banks and corporates to address the unmet needs of fast-growing SMEs, and with our team of veterans in SME banking, technology and data science, we are confident that we can succeed in our application and help enhance the business and financing ecosystem here," said Ajit Raikar, Co-Founder and Chief Executive Officer, Validus Capital.

"Validus is well-positioned to build Singapore's first digital bank and empower SMEs through tailored financing solutions at home and beyond. With an experienced team of visionaries and vast network of partnerships, they are well-positioned to enable SMEs to grow to their fullest potential and drive financial inclusion in Southeast Asia," said Chua Kee Lock, Managing Partner, Vertex Ventures SEA & India.

In February 2019, Validus raised S$20.5 million (US$15.2 million) in an oversubscribed Series B funding round and established its presence in Indonesia in April 2019 as Batumbu. Moving forward, Validus looks to expand into new markets within Southeast Asia, including in Thailand and Vietnam, to continue accelerating financial inclusion among the region's SMEs.