Validus raises $50m from HSBC to fuel digital lending for Indonesian MSMEs

By Gloria Mathias

Validus, a digital SME lending platform headquartered in Singapore, has announced the establishment of a debt facility of up to $50 million from HSBC under the ASEAN Growth Fund strategy and is aimed to support financial inclusion for MSMEs in Indonesia, addressing their challenges in accessing economic resources.

The facility will be deployed through Validus’ Indonesian subsidiary, Batumbu, which is currently the digital SME financing platform in Indonesia.

This debt facility will offer more accessible financing options, supporting Indonesian MSMEs in overcoming financial barriers and enhancing their role in driving the country’s economic development while also addressing the financing gap in Indonesia.

According to a press release from Indonesia’s Ministry for Economic Affairs, there are currently 64.2 million MSMEs that contribute 61% of Indonesia’s GDP and absorb 97% of the country’s total workforce. A World Bank report highlights that Indonesian MSMEs face major challenges in securing financing due to the stringent requirements imposed by banks.

Nikhilesh Goel, Co-founder and Group CEO of Validus, 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. By leveraging Batumbu’s unique position as the largest and only profitable digital SME financing platform in the country, we are committed to unlocking new opportunities for businesses, driving economic growth, and enhancing financial inclusion. We are honoured to work with HSBC on this pivotal initiative, which will enable Validus to make a larger impact on the Indonesian economy.”.

Harish Venkatesan, Head of Corporate and Business Banking, HSBC Singapore, shared, “As one of the leading MSME digital financing players in the ASEAN region, we are pleased to support Validus in playing an instrumental role in promoting financial inclusion to underserved small businesses in this region. MSMEs play a key role in 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.”