Validus Capital joins Singapore banks in offering government-backed loans

VALIDUS Capital has joined the Singapore banks in offering government-backed loans under Enterprise Singapore's Enterprise Financing Scheme.

The Singapore-based fintech this week secured official approval to offer small and medium-sized enterprises (SMEs) financing that has up to 90 per cent of the risk taken up by the government.

A Validus spokesperson told The Business Times that it is using data analytics to assess the creditworthiness of the SMEs, by accounting for both pre-Covid and post-Covid performance to provide an "adjusted and dynamic" view of the trade data.

Among other things, Validus screens SMEs as well for litigation processes, or that have current bankruptcy proceedings against directors. "A lot of SMEs are bouncing back stronger as the economy opens up," the spokesperson said.

As for the type of such government-backed loans available, the fintech expects to mainly dole out working-capital loans over the next six to nine months.

It also expects to stick with the usual loan size of between S$50,000 and S$300,000 per SME. The tenures are likely to be slightly shorter than those of banks, the Validus spokesperson said.

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Validus Capital will use its balance sheet to fund the loans under the Enterprise Singapore schemes. This means these loans cannot be funded by peer-to-peer investments.

In a statement, Nikhilesh Goel, co-founder and chief executive of Validus, said: "Through these government-assisted schemes, we look forward to playing a much larger role in addressing the financing needs of underserved SMEs and those impacted by the pandemic."