Fintech firms are stepping up cooperation with banks to increase lending

VIETNAM, December 24 –

HÀ NỘI — Both foreign and domestic fintech firms are promoting ties with commercial banks to lend unsecured loans to individuals, and small and micro businesses as demand for consumer and business loans increases at the end of the year.

With the support of the International Finance Corporation (IFC), Validus Vietnam, a leading fintech firm supporting loans to small and medium enterprises (SMEs) in Singapore, expanded its operations in the Vietnamese market. Accordingly, Validus Vietnam has connected 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 partnered with TTC Group and Do Ventures to deploy a capital support solution for businesses in the global commodity supply chain. Specifically, the three organizations have launched the eBIZ super-fast loan platform, which helps borrowers get unsecured loans within 48 hours at a maximum value of VNĐ500 million per enterprise and a loan period of 12 months.

Đinh Văn Bình, CEO of Validus Vietnam, said that Validus has so far disbursed more than US$1 billion to SMEs in Singapore, Việt Nam, Indonesia and Thailand.

With the cooperation with the TTC Group, and in close cooperation with the Vietnam Young Entrepreneurs Association, it is quite possible for Validus Vietnam to develop small loans for 9,000 members of the Vietnam Young Entrepreneurs Association, said Bình.

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

For example, Singapore-based Funding Societies, after receiving a $22.5 million investment from VNG last April, has developed a system of 150,000 agents and retail stores, accelerating the disbursement of nearly $2 billion in unsecured loans to small and medium-sized enterprises.

Another fintech company, Kredivo, recently partnered with VietCredit and Sendo to offer buy-now-pay-later services for individuals and small and micro businesses in HCM City and other major cities.

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

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

Techcombank and VPBank are betting on fintech as they collaborate with Vinshop and DMSpro SmartPay respectively.

More specifically, Techcombank has built a customer base of around 100 million grocery store owners. The Vinshop application provides a maximum capital advance service of VNĐ100 million to customers through Techcombank accounts along with expansion to WinMart and WinMart+ supermarket chains with the support of Masan.

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

FE Credit has partnered 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 partnered with MoMo e-wallet to develop unsecured loan products disbursed via this wallet application.

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

According to Phạm Quang Minh, general manager of Mambu Vietnam, alternative forms of lending, such as unsecured lending, will thrive in the coming years, in the context that small and medium-sized enterprises have run out of security. SMEs will turn to borrowing from digital banks and finance companies. According to a Mambu survey, about 52 percent of SMEs in Việt Nam will switch to accessing loans from companies with better financial solutions, while 42 percent of businesses will choose companies with better digital services.

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