Validus Vietnam and Nafoods Group partner to boost financing for Agriculture Sector in Vietnam
- Validus Vietnam looks to boost business financing in the agricultural sector – a sector which grew 29 per cent in 2018 and is worth US$438 billion (S$608.6 billion) – starting with providing supply chain financing to Nafoods Group and its SME suppliers
- With access to business financing, SMEs can grow their business, supporting Vietnam’s agricultural production value chain and grow regional exports
- This marks Validus Vietnam’s third partnership in the country in less than three months, following its pilot partnership programme with Medicare Vietnam and Unicons
SINGAPORE, 11 February 2020 – Validus Vietnam, the Vietnam entity of Singapore’s largest SME financing platform, Validus Capital (Validus), is collaborating with Nafoods Group JSC (Nafoods) to provide supply chain financing to Nafoods and the small and medium enterprises (SMEs) within its ecosystem.
Agriculture is a crucial sector that accounts for 10 per cent of Vietnam’s gross domestic product (GDP) and supports 40 per cent of its total employment. Agricultural exports like fruits and vegetables surged by 29 per cent in 2018, contributing US$438 billion (S$608.6 billion) to the country – exceeding conventional commodities like crude oil and rice. Local SMEs make up 97 per cent of the total number of registered enterprises in Vietnam, but these businesses face an unmet US$21 billion (S$29.2 billion) SME financing gap in the country.
Ms Tran Thi Thuy Ha, Chief Business Officer of Validus Vietnam, said “SMEs play a crucial role to the country’s economy. With access to financing, these SMEs are able to obtain capital to fund their business operations, expand and accelerate their business growth. Validus Vietnam is proud to be working alongside Nafoods Group and its SMEs, as agriculture continues to be a key sector that contributes significantly to the country’s economy.”
The partnership iterates Validus’ commitment to provide ways and bridge the financing gap that many SMEs face when it comes to business financing. Through its Corporate Partnership programme, Validus seeks to actively work with companies like Nafoods to provide supply chain financing to its SMEs such as farmers and distributors.
Nafoods is a Vietnamese agri-food business and manufacturer that integrates agricultural processing from farm to distribution. It is also backed by International Finance Corporation (IFC), a member of the World Bank Group that works with the private sector in developing countries to create markets that open up opportunities for all.
Mr Nguyen Manh Hung, Chairman and CEO of Nafoods Group, shared that many farmers and SMEs along the supply chain sometimes do not get the funding on time to purchase their primary materials for crop growth. “Many agricultural SMEs in Vietnam face financial issues due to challenges in getting loans from banks such as insufficient collateral, strict corporate customer screening criteria and lack of financial literacy. Through working with Validus Vietnam, SMEs can obtain financing in time to improve their productivity to grow and expand their businesses.”
Mr Nguyen Chi Long – General Director of Long Hue Investment Joint Stock Company, an SME supplying to Nafoods, shared that he was able to boost his cash flow for operational expenses and expand his business operations after receiving funding from Validus Vietnam. “In the past, it was difficult for small business owners, like myself, to obtain sufficient funding from banks due to the lack of collaterals and business records. Thanks to Validus Vietnam, I can now receive financing on time to purchase farming equipment to harvest fruits and vegetables from my farm and sell them to Nafoods. I managed to have more cashflow to purchase new supplies and to expand my crop offerings.”
“These SMEs each play an important role in supplying local produce like fruits and nuts, supporting and helping to boost Vietnam’s strong food culture. Validus is proud to be a part of Vietnam’s agricultural ecosystem by supporting the SMEs in Nafoods’ supply chain with much-needed financing” added Ha.
Focusing on agri-business, Nafoods marks Validus Vietnam’s third corporate partnership in the country within a short span of less than three months since its launch last November. This comes after Validus Vietnam’s pilot partnership project with Medicare Vietnam, the largest pharmacy, health, beauty and personal care retail group; and Unicons, a member of Coteccons Group, one of the leading private construction enterprises in Vietnam.
Validus Vietnam looks to plug the unmet financing needs of SMEs in Vietnam’s burgeoning industries like agriculture, manufacturing, wholesale trade and healthcare. It operates using the same proprietary technology and credit scoring systems used in Singapore and Indonesia (known as Batumbu) to provide local SMEs to fast, reliable and affordable sources of growth financing.
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About Validus Vietnam
Validus Vietnam, based in Ho Chi Minh City, aims to drive growth financing in Vietnam’s unbanked and underserved SME sectors, through Validus’ proprietary technology and credit scoring systems that leverages data analytics and AI solutions. It was launched by Singapore’s largest and award-winning SME financing platform Validus Capital in October 2019. Backed by AAA-rated Dutch Development Bank FMO, Vertex Ventures and VinaCapital, Validus Capital has operations in Singapore, Indonesia and Vietnam. To date, Validus Capital has facilitated over S$300 million in business financing to SMEs in Singapore. For more information, please visit www.validus.vn
About Nafoods Group
Nafoods Group is among the most innovative fruit and vegetable growers, processors and exporters in Vietnam, specializing in fruit juice/NFC, puree, concentrate, IQF and fresh fruits. The company sources more than 13,300 tons of fresh and processed fruits annually from farmers located in various regions in Vietnam including the Central Highlands, West Northern Mountains, and North Central Coast regions.
The company’s products are distributed all over the world, especially in Europe, the United States of America, Oceania, Middle East, Japan and Korea.
Nafoods Group is one of the front-runners in Asia in the field of integrated agricultural processing. Nafoods Group has taken full control over its own value chain including raw material areas (seedling, cultivating, growing), harvesting (fresh fruit), processing & manufacturing, exporting & distribution to bring the highest added value for customers, society, employees and shareholders.
As published on e27: Validus teams up with Nafoods to provide business financing to farmers, distributors in Vietnam
With access to business financing, SMEs can grow their business, supporting Vietnam’s agricultural production value chain and grow regional exports.
As published on finews.asia: Validus Announces Agriculture Sector Partnership in Vietnam
Validus Vietnam, the Vietnam entity of small and medium enterprise (SME) financing platform Validus Capital, is partnering NaFoods Group to provide the firm and agricultural SMEs in its ecosystem, such as farmers and distributors, with business financing.
As published on PYMNTS: Financing Vietnam’s Underbanked And High Risk Agri-SMBs
While a lack of access to affordable, quick capital is a barrier to growth for small businesses across the globe, there are certain markets and certain industries in which those hurdles are particularly high.