Siam Validus partners with SCG and aims to drive financial inclusion for underserved Thai SMEs, enabling SMEs to raise funds for their business without collateral via Siam Validus crowdfunding platform.
Ms. Wareemon Niyomthai, CEO of Siam Validus, said, “SMEs are the backbone of the Thai economy, and despite that, they often face uphill challenges in getting access to the funding they need for liquidity and business growth. Through our crowdfunding platform, SMEs will be able to tap retail investors in the capital markets to raise funds ranging from 0.2 million baht to 30 million baht. Siam Validus will disburse approximately three billion baht to micro and small businesses in Thailand by end 2022, having already crossed 1 billion baht so far with zero non-performing loans. Our partner SCG Distribution has a deep understanding of its industries and access to a large ecosystem of SMEs, and our partnership will enable us to leverage synergies to expand credit access and alleviate liquidity challenges for SMEs during this difficult time due to the Covid-19 outbreak.”
Validus has successfully raised over 30 billion baht for SMEs in ASEAN and aims to double the amount to 60 billion baht in the next 12 months.
Ms. Wareemon added: “At the same time, we are democratising access to an exciting new asset class traditionally limited to affluent individuals and institutional investors. With the recent reduction of deposit protection and volatility across the market, retail investors are in pursuit of alternative asset classes for investments. Through Siam Validus, retail investors can invest in carefully selected creditworthy, high-growth SMEs through debentures with varying tenor and returns that fit their risk appetite, and earn 4%-15% interest in return in the form of debt repayment on their investments. The new asset class offers good portfolio diversification opportunity along with higher returns than bank deposit rates. Siam Validus’ crowdfunding platform is regulated by Securities and Exchange Commission (S.E.C), therefore investors can be assured that their investment activities will be conducted on a regulated platform with transparency.”
“As Validus Group, we have more than six years of experience and expertise in digital SME financing, and our number one position as the leading SME growth financing platform in all of the Southeast Asia markets that we operate in attests to our robust, data-driven approach to SME lending. Using alternative trade and credit data, we have developed proprietary credit-scoring models to effectively assess growing SMEs at Siam Validus best ability, who typically are unable to get financing from banks without placing collateral or without financials. Our proven business model has helped to bridge the cashflow gap for more than 50,000 SMEs across Southeast Asia and deliver mutually beneficial outcomes for SMEs, investors and partners.”
Mr. Bunn Kasemsup, Chief Strategy & Investment Officer of SCG Cement & Building Materials, said: “SCG is committed to Environmental, Social, Governance (ESG) business guidelines to create sustainable development. Among our many initiatives is Financial Inclusion. Through Siam Validus’ crowdfunding platform, we are confident that we can create meaningful and sustainable value for the SMEs in our ecosystem – customers, distributors, sub-distributors and partners will benefit from alternative access to financing. In turn, SMEs with healthy cash flows will strengthen and benefit SCG. Together with Siam Validus, we’re excited to be at the forefront of innovating the way SMEs can raise funds in the capital markets, and we look forward to further advancing the growth of SMEs in Thailand.”
SMEs are an integral part of the Thai economy, accounting for 95% of all businesses, and responsible for 80% of employment in the country. Despite this, SMEs can only access 1,289 billion baht in capital, which is only around 10% of the country's GDP.
Since its launch in 2015, Validus has disbursed over US$1 billion in SME loans across Singapore, Vietnam, Indonesia and Thailand. The company is backed by highly reputed VCs, including FMO, Vertex Growth, Vertex Ventures Southeast Asia and India, AddVentures by SCG, K3 Ventures, Openspace Ventures and VinaCapital Ventures.