Alternative lending platform Validus is deploying Visa virtual card technology to help small and medium-sized enterprises in Singapore with unpaid invoices access working capital, according to an announcement Thursday (June 22).
Reports said Validus is using its securities crowdfunding platform and risk analysis technology to assess the creditworthiness of SME borrowers with unpaid invoices. Validus operates a platform through which investors can provide financing to SMEs directly.
"SMEs don't have hard collateral, but what they do have is a track record and a history of working with their vendors," said Validus Chief Operations Officer Nikhilesh Goel in an interview with Singapore news outlet Today.
According to Goel, those funds are then provided to SMEs via a Visa virtual commercial card.
"By clearing invoices for SMEs using a Visa virtual card, Validus helps SMEs expand faster and have a faster turnover for their products and services," Goel added, pointing to the food and beverage industry, distributors, and service providers as particular verticals that may find the solution especially useful.
"Small businesses often face challenges such as access to capital to fund their business growth and this makes them vulnerable," said Visa Head for B2B Partnerships and Small Business Asia Pacific Vikram Kshettry in another statement. "Similarly, suppliers for these businesses may be challenges to provide adequate credit, as they do not have the skills to underwrite higher credit lines."
"It is essential that businesses are able to access credit from specialist lenders to invest in their businesses and for suppliers to be paid on time," Kshettry added. "The presence of such lenders, who can respond faster to business needs, is key to Singapore's continued SME growth."
Reports said the tie-up with Validus is part of Visa's broader focus on Singapore. Earlier this year the company paired with Citi to launch an eProcurement platform in the country; the company is also looking to take advantage of and promote Singapore's migration away from cash toward digital payments.