Validus Capital, an SME fund box that links investors to Singaporean SMEs, claims it will be the first platform in Singapore to provide investor protection for their invoice financing loans.
In a press note to finews.asia, the firm said it is keen to emphasise its new rigorous 80-point due diligence and risk assessment process, conducted on the Singaporean loan applicants, backed by data from from Singapore Commercial Credit Bureau as well as the Credit Research Institute (CRI), founded by Professor Jin-Chuan Duan at RMI-NUS.
Partnering with insurance provider, EQ Insurance, Validus Capital will join the ranks of China’s Lufax, which launched in 2011 and is now valued at $18bn.
Select Pool
The CRI team provides Validus with a reasonably sophisticated solution in capturing the Probability Default (PD) of SME's. The CRI is a not-for-profit enterprise, viewing credit ratings as a ‘public good’, challenging to move away from the current ‘for-profit’ model.
The strength of this risk control, with an additional daily credit monitoring report on borrowers, means more visibility and greater investor protection. Validus Capital provides a select borrowing pool of quality, growth-oriented, SMEs with EQ Insurance providing blanket cover across all invoice financing loans.
Zero Default Rate
«We recognise the quality and importance of Singapore’s SMEs, as our platform supports their continued growth. As the industry matures, our partnership with EQ Insurance will give greater confidence, to investors and borrowers alike, in the capability and stability of our platform,» said Richard Hoon, Chairperson of Validus Capital.
Validus Capital have provided an average loan of $200,000 with a tenure of six months. Sixty-one percent of loans are to borrowers with a Dun & Bradstreet credit risk grade of less than or equal to 3, indicating a fair rating. With its rigorous due diligence, Validus Capital thus far has had a zero percent default rate, coupled with a greater than 18 percent annualised return to investors.
