Modalku Continues Regional Expansion to Vietnam

Modalku Group inaugurated its business expansion in Vietnam. This move marks the Modalku Group's fifth expansion in Southeast Asia after Indonesia, Singapore, Malaysia and Thailand, to accommodate MSME actors who have limited access to capital.

Meanwhile, Modalku Group has been operating in Vietnam since December 2021. To date, the company has disbursed more than $20 million in loans, and the amount will be increased to $90 million this year.

With this expansion, Modalku Group will serve MSMEs in various sectors, such as education, retail, technology, and FMCG, by offering trade finance, inventory financing, receivables and debt financing products in Ho Chi Minh, Hanoi, and beyond.

"This is the right momentum to build a solid team and secure funding considering the global pandemic situation is starting to decline. We believe Vietnam will become one of our biggest markets by looking at its potential," said Modalku Co-Founder & CEO Reynold Wijaya in his official statement.

Since the Covid-19 pandemic, access to capital has hampered the growth of MSMEs in Vietnam. Based on data from the Ministry of Planning and Investment of Vietnam, MSMEs accounted for 98% of total businesses in 2020. However, only 54% of registered MSMEs were actively operating in 2019. In fact, MSMEs have provided jobs for 5,6 million people and contributed more than $241 billion or 40% of GDP in Vietnam.

According to Country Director of Funding Societies Vietnam, Ryan Galloway, MSMEs in Vietnam do not have access to business entities with the same capital as other Southeast Asian regions. However, business actors in Vietnam have strong competitiveness with limited resources.

“We are excited to support the burgeoning MSME sector here so we can serve the needs of millions of MSMEs across Southeast Asia,” added Galloway.

Market adaptation

Kicking off 2022, Vietnamese tech giant VNG Corporation puts $22,5 million into the Modalku Group as part of Series C+ funding of $144 million and a $150 million loan facility. In addition to VNG, this funding round also involved other investors, including SoftBank Vision Fund 2, Rapyd Ventures, EDBI, Indies Capital, Ascend Vietnam Ventures, and K3 Ventures.

According to Reynold, the involvement of VNG investment will enable the Modalku Group to adapt in the local market so that it can create solutions according to business needs in Vietnam.

Furthermore, following the success of the Modalku Group in other countries, Galloway said it would shorten the loan process completion time by automating operational and appraisal processes (underwriting) for SMEs in Vietnam.

In addition, the Modalku Group also plans to bring digital funding nationally with local currency in the middle of this year. The Modalku Group also opens up opportunities for collaboration with various technology and banking platforms to support the medium and long-term mission of becoming neobanks.

For your information, recently the Modalku Group together with the automotive buying and selling platform Carro announced a joint stock investment (co-investment) at PT Bank Index Selindo (Index Banks). There is no mention of the value of this joint investment.

The Modalku Group, otherwise known as Funding Societies, claims to be the only digital-based MSME funding platform that is licensed and registered in five countries in Southeast Asia. In its seventh year of operation, Modalku Group has disbursed funding of more than Rp33,27 trillion to more than 5 million loans.

Modalku seeks to address the financial gap for SMEs in Southeast Asia. The products offered include term loan facilities to various trade-based financing options, such as: invoice financing.