Validus, headquartered in Singapore, has announced a new partnership with HSBC, establishing a $50m debt facility aimed at bolstering financial inclusion for micro, small, and medium enterprises (MSMEs) in Indonesia.
This initiative falls under HSBC’s ASEAN Growth Fund strategy and seeks to mitigate the financial accessibility challenges faced by Indonesian MSMEs.
The investment, channelled through Validus’ Indonesian subsidiary, Batumbu, marks a significant push to support the economic development of Indonesia. Batumbu stands out as the largest digital SME financing platform in the country, boasting over two years of profit growth and EBITDA margins above 50%.
This collaboration between Validus and HSBC addresses a critical financing gap highlighted in recent reports. Despite making up 61% of Indonesia’s GDP and employing 97% of the workforce, MSMEs receive only about 20% of total bank loans. The World Bank and the International Finance Corporation estimate the financing shortfall at approximately $234bn.
Nikhilesh Goel, Co-founder and Group CEO of Validus, commented on the partnership, “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 at HSBC Singapore, said, “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 contributing to the long-term economic success in the ASEAN region and beyond. We look forward to supporting Validus in their mission to drive regional growth through the HSBC ASEAN growth fund.”
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