View of a grocery store in Ha Noi. Fintech firms have connected with banks to promote lending to thousands of SMEs in many industries, including retail. — Photo

With support from the International Finance Corporation (IFC), Validus Vietnam, a leading fintech firm which supports loans for small- and medium-sized enterprises (SMEs) in Singapore - expanded its operations in the Vietnamese market. Accordingly, Validus Vietnam has connected with thousands of SMEs in the retail, food, healthcare, garment, pharmaceutical and logistics industries to promote lending.

According to Validus, to increase its service coverage, it has cooperated with TTC Group and Do Ventures to deploy a capital support solution for businesses in the global goods supply chain. Specifically, the three organisations have launched the eBIZ super-fast loan platform, which helps borrowers get unsecured loans within 48 hours for a maximum value of VND500 million per enterprise and a loan term of 12 months.

Dinh Van Binh, managing director of Validus Vietnam, said Validus has so far disbursed more than US$1 billion to SMEs in Singapore, Viet Nam, Indonesia and Thailand.

With the cooperation with TTC Group, and working closely with the Vietnam Young Entrepreneurs Association, it is completely feasible for Validus Vietnam to develop small loans for 9,000 members of the Vietnam Young Entrepreneurs Association, Binh said.

Besides Validus Vietnam, other foreign fintech firms that connect unsecured loans are also expanding cooperation with financial institutions to promote lending to SMEs.

Singapore-based Funding Societies, for example, after receiving an investment of $22.5 million from VNG in April last year, has developed a system of 150,000 agents and retail stores, and accelerated the disbursement of nearly $2 billion of unsecured loans for SMEs.

Another fintech company, Kredivo, recently cooperated with VietCredit and Sendo to provide buy-now-pay-later services for individuals, and small and micro enterprises in HCM City and other big cities.

Meanwhile, Sumitomo Mitsui Banking Corporation (SMBC) in mid-November 2022 also announced an investment of 1.3 billion yen (equivalent to about $10 million) in SmartNet JSC to promote SmartPay application development, targeting customers who are small and micro enterprises, as well as developing buy-now and post-paid solutions for about 667,000 sellers in 63 provinces and cities across the country.

As foreign fintech firms are proactively cooperating to expand unsecured consumer loans and fund SMEs, domestic banks and fintech firms are also in the game.

Techcombank and VPBank are focusing on fintech as they cooperate with Vinshop and DMSpro SmartPay, respectively.

Specifically, Techcombank has built a customer base with about 100 million grocery store owners. The Vinshop application is providing a maximum capital advance service of VND100 million to customers through Techcombank accounts along with expanding to WinMart and WinMart+ supermarket chains with the support of Masan.

Meanwhile, VPBank has cooperated with DMSpro, Bonbon Shop and SmartPay to focus on startup and household lending. Bonbon Shop acts as a link between the manufacturer and the retailer, SmartPay e-wallet provides payment methods, while VPBank Commcredit is an unsecured lender that uses a customer’s credit score as measured by a digital system.

FE Credit has cooperated with ViettelPay to launch Paynow, an e-wallet with the function of buying now and paying later. Meanwhile, HomeCredit chose Tiki to launch a Home PayLater product with similar features. And recently, Easy Credit, a consumer lending brand of Electricity Finance Company, has cooperated with MoMo e-wallet to develop unsecured loan products disbursed via this wallet application.

In the near future, ZaloPay will cooperate with Malaysia’s CIMB to deploy pre-buy-post-paid services and provide unsecured loans to small and micro enterprises.

According to Pham Quang Minh, general director of Mambu Vietnam, in the context that SMEs have run out of collateral, alternative forms of lending, such as unsecured lending, will thrive in the next few years. SMEs will turn to borrowing from digital banks and financial companies. According to a Mambu survey, about 52 per cent of SMEs in Viet Nam will switch to accessing loans from companies with better financial solutions while 42 per cent of businesses will choose companies with better digital services.

Competition to provide unsecured loans based on data digitisation platforms and multi-party linkages will become increasingly fierce. The trend of coordination between banks and fintech firms, or banks and large corporations and groups in the supply chain will become more popular as the country’s legal regulations for digital banks and fintech firms are officially applied, Minh said. — VNS