Validus teams up with Nafoods to provide business financing to farmers, distributors in Vietnam

Validus Vietnam, a unit of Singapore’s small and medium enterprises (SMEs) financing platform Validus Capital, has announced a partnership with Nafoods Group, an agri-food business and manufacturer, to provide supply chain financing to SMEs, such as farmers and distributors in Vietnam.

With access to business financing, SMEs can grow their business, supporting Vietnam’s agricultural production value chain and grow regional exports.

This marks Validus Vietnam’s third partnership in the country in less than three months, following its pilot partnership programme with Medicare Vietnam and Unicons.

Agriculture is a crucial sector that accounts for 10 per cent of Vietnam’s gross domestic product and supports 40 per cent of its total employment. Agricultural exports like fruits and vegetables surged by 29 per cent in 2018, contributing US$438 billion to the country — exceeding conventional commodities like crude oil and rice.

Local SMEs make up 97 per cent of the total number of registered enterprises in Vietnam, but these businesses face an unmet US$21 billion SME financing gap in the country.

Tran Thi Thuy Ha, Chief Business Officer of Validus Vietnam, said: “SMEs play a crucial role in the country’s economy. With access to financing, these SMEs are able to obtain capital to fund their business operations, expand and accelerate their business growth.”

Also Read: Validus Capital enters Vietnam; eyes a slice of the US$21B SME financing market

Nguyen Manh Hung, Chairman and CEO of Nafoods, shared that many farmers and SMEs along the supply chain sometimes do not get the funding on time to purchase their primary materials for crop growth.

“Many agricultural SMEs in Vietnam face financial issues due to challenges in getting loans from banks such as insufficient collateral, strict corporate customer screening criteria and lack of financial literacy. Through working with Validus Vietnam, SMEs can obtain financing in time to improve their productivity to grow and expand their businesses,” said Hung.

Based in Ho Chi Minh City, Validus Vietnam aims to drive growth financing in Vietnam’s unbanked and underserved SME sectors, through its proprietary technology and credit scoring systems that leverage data analytics and AI solutions. It was launched in October 2019.

Validus Vietnam looks to plug the unmet financing needs of SMEs in the country’s burgeoning industries like agriculture, manufacturing, wholesale trade and healthcare. It operates using the same proprietary technology and credit scoring systems used in Singapore and Indonesia (known as Batumbu) to provide local SMEs to fast, reliable and affordable sources of growth financing.

Backed by Dutch Development Bank FMO, Vertex Ventures and VinaCapital, Validus Capital has operations in Singapore, Indonesia and Vietnam.

To date, Validus Capital has facilitated over S$300 (US$216) million in business financing to SMEs in Singapore.

Nafoods is fruit and vegetable growers, processors and exporters in Vietnam. The company sources more than 13,300 tons of fresh and processed fruits annually from farmers located in various regions in Vietnam, including the Central Highlands, West Northern Mountains, and North Central Coast regions.

The company’s products are distributed all over the world, especially in Europe, the US, Oceania, the Middle East, Japan and Korea.

It is backed by International Finance Corporation.

 

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