The signing ceremony between Validus Vietnam and Nafoods. – VNS Photo
Validus Vietnam, the Viet Nam entity of Singapore’s 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.
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.
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.”
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 Viet Nam 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,” he said
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.
Agriculture is a crucial sector that accounts for 10 per cent of Viet Nam’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 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 SME financing gap in the country. – VNS