Below is our recent interview with Sonal Jain, Chief Data Officer at Validus Capital:
Q: Could you provide our readers with a brief introduction to Validus Capital?
A: Validus is Singapore’s no. 1 peer-to-business lending platform, having disbursed a record SGD 180 million to date since we started in 2015. The inability to access funds is often the main reason for failure among SMEs. Validus’ peer-to-business lending platform addresses SMEs’ cash flow gap, by providing access to financing from accredited investors. The ease, speed and flexibility of obtaining funds makes Validus a suitable financing alternative compared to conventional loan options.
Q: How exactly does it work?
A: We address the financing gap SMEs face by leveraging technology and innovation to provide a fast, safe and reliable source of funds for growing businesses. With zero-collateral financing and affordable interest rates, our platform connects businesses to Institutional and Accredited Investors quickly and efficiently. In using data analytics to fund growing businesses, we glean data-driven insights through machine learning and AI to make better informed lending decisions, and make use of sophisticated credit scoring and technology in our processes.
Q: Why should investors or businesses choose Validus?
A: •We’re led by a highly experienced team, and have developed a robust risk algorithm in partnership with the Credit Research Initiative Team of NUS-RMI. In utilising machine-learning and AI to fund growing businesses, our team of data scientists analyses and utilises new, complex datasets that uncover new insights into local businesses, help us make better informed lending decisions and predict needs for businesses as they win new contracts and project.
•Our data-driven, collaborative approach to business lending also mean we’ve forged strong industry partnerships to deliver innovative financing solutions, e.g. with Visa as their regional B2B lending partner; launched a partnership with a global bank in Singapore. In addition to being licensed and regulated by the Monetary Authority of Singapore, we’re also an approved financing partner on GeBIZ (Singapore Government’s one-stop e-procurement portal). Finally, a big differentiator for us is the ability to lend at bank-like rates given our institutional lenders. We are also the only platform in Singapore to have a $20M fund dedicated to lend to SMEs, which can be scaled to $200M.
Q: How are you different from a bank?
A: Traditionally, banks have been the backbone small businesses relied upon to access financing for scaling-up. With the advent of FinTech and the emergence of online lending in recent years, innovators are disrupting traditional lending models by offering small businesses alternative options to easily secure financing. With enterprises in Asia’s emerging markets largely comprising SMEs, alternative lending is growing in popularity as small business tend to see it as an easier path to financing than traditional finance institutions. P2P Lending platforms like Validus invoices via an online community of investors. While businesses (especially SMEs) can access finance quickly, investors can earn good returns on their money through a diversified portfolio. By applying the principles of P2P lending, the invoice will be financed by investors in the Validus community.
We’ve made it possible for many SMEs who weren’t previously able to obtain bank loans to get financing without the need to pledge assets or collateral. Our ability to deliver quick credit decisions and funding means eligible SMEs can now access ready funds in less than 48 hours.
Q: What makes Singapore Southeast Asia’s FinTech leader?
A: Singapore has been described as the ideal test bed for FinTech solutions with its well established and diversified financial sector hub, and its underlying strong regulatory and legal framework. In addition, the Government has rolled out several initiatives, such as launching the Fintech Fast Track initiative (by the Intellectual Property Office of Singapore), which will shorten the time for granting patents for fintech innovations from two years to six months. On a similar note, the Monetary Authority of Singapore (MAS) has both defined regulations and encouraged experimentation, opening a FinTech Innovation Lab to support the development and adoption of application program interfaces (APIs) in the financial industry.
Q: What are your plans moving forward?
A: In the next couple of years, we’re looking forward to making a bigger difference to SMEs, the backbone of our economy, by driving business financing of over $1 billion and bringing financing solutions to SMEs beyond Singapore, such as, Indonesia and other Southeast Asian countries. Our aim is to break barriers and boost growing SMEs and the economies.