HSBC Provides IDR776 Billion Debt Facility to Validus, Focuses on Developing Indonesian Market Through Batumbu

Validus, a digital funding platform for MSMEs based in Singapore, announced the acquisition of a $50 million debt facility or equivalent to Rp776 billion from HSBC. This facility is under the strategy ASEAN Growth Fund and aims to support financial inclusion for micro, small and medium enterprises (MSMEs) in Indonesia, and help them overcome challenges in accessing financial resources.

The debt facility will be channeled through Validus' subsidiary in Indonesia, Batumbu, which is currently a digital funding platform for MSMEs. Batumbu is claimed to have recorded growing profits for more than two years with an EBITDA margin that consistently exceeds 50%.

PT Berdayakan Usaha Indonesia (Batumbu) itself was founded as joint venture PT Triputra Investindo Arya (a subsidiary of Triputra Group) with Validus Investment Holdings Pte. Ltd. (VIH).

This facility will focus on providing more accessible financing options, so that it can help Indonesian MSMEs overcome financial barriers and strengthen their role in driving national economic growth. In addition, this facility is also expected to reduce the financing gap which is still a major challenge in Indonesia.

According to data from the Coordinating Ministry for Economic Affairs of Indonesia, there are currently 64,2 million MSMEs that contribute 61% of Indonesia's GDP and absorb 97% of the total workforce in the country. However, a World Bank report shows that MSMEs in Indonesia face great difficulties in obtaining financing due to strict requirements imposed by banks. Despite various government initiatives, MSME loans only cover about 20% of total bank loans. The International Finance Corporation estimates that the financing gap for MSMEs in Indonesia is around $234 billion.

Validus Co-founder & Group CEO Nikhilesh Goel said, "This long-term partnership with HSBC strengthens our efforts to bridge the financing gap for MSMEs in Indonesia. We will continue to pioneer innovation and drive progress in the lending space. Leveraging Batumbu's unique position as the largest and only profitable MSME digital financing platform in the country, we are committed to unlocking new opportunities for businesses, driving economic growth, and increasing financial inclusion."

HSBC Singapore Head of Corporate and Business Banking Harish Venkatesan added, "As one of the key players in digital MSME financing in the ASEAN region, we are pleased to support Validus in playing a critical role in promoting financial inclusion for underserved small businesses in the region. MSMEs play a critical role in contributing to the long-term economic success of the ASEAN region and beyond. We look forward to supporting Validus in its mission to drive regional growth through the HSBC ASEAN Growth Fund."

Since 2021, Validus has disbursed S$5,17 billion in funding. The company is backed by strategic investors and VCs, including Vertex Ventures, FMO, 01Fintech, NongHyup Financial Group, Norinchukin Bank, Aizawa Asset Management, Lotte F&L, AddVentures by SCG, VinaCapital Ventures, SEA Frontier Fund, K3 Ventures, and Openspace Ventures.

Headquartered in Singapore, Validus has expanded its presence in Indonesia (Batumbu), Vietnam (Validus Vietnam), and Thailand (Siam Validus).

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Disclosure: This article was produced with AI technology and supervision of the content writer