SME Financing in Vietnam: An attractive investment opportunity amidst COVID-19

The increasing spread of COVID-19 has led to more disruption across markets. With financial markets across the globe plummeting in response, investors have sought the safety of cash. 

However in the context of Vietnam, current investment trends reflect portfolio shifts into other traditional investment channels such as real estate, stocks, bonds and savings – many of which are currently experiencing high volatility.

Validus is pleased to introduce to our investors a new, short-term investment opportunity in Vietnam that offers returns from 14%*/ year, effective portfolio diversification for managed risk. 

 

Investment Channel

Fluctuations in Q1

Details
STOCKS

Decrease more
than -30%

  • The VN-Index recorded a drop of more than 30% in Q1 due to investors’ concerns about the disease situation and the sell-off momentum of foreign funds despite the government’s economic support packages being activated.
  • The market is quite unstable during the epidemic phase. Read more »
REAL ESTATE

**Low liquidity

  • The market has traded slowly, especially with the lowest apartment supply in the last 5 years. Read more »
  • Most investors are afraid of investing due to long tenor commitment, low liquidity, large investment capital and unpredictable fluctuations due to disease.
  • Compared to the end of 2019, the average primary price of the apartment segment in Ho Chi Minh City tended to decrease. Read more »
TERM DEPOSIT

Below 5%/ year for less than 6 months tenor

  • It is not really an attractive investment channel because the interest rate of term deposits has dropped sharply because the government regulates to help businesses to overcome difficulties during the epidemic phase.
  • It is safe to keep cash as term deposit; however, interest rate is only 2-3% greater than inflation.
BONDS

8-9.5%/ year

  • Interest is higher compare to Term Deposit
  • Bonds with high interest rate pose risks
  •  Prestigious corporate bonds are attractive to investors but the interest rate of 8-9%/ year is not really attractive.
GOLD

+12%

  • Low investment capital, flexible investment time
  • Easy to buy and sell, high liquidity
  • Gold is a good channel for investors during the economic crisis and war, but the price of gold is high and unpredictable fluctuations in the Covid-19 epidemics.
USD

1-1.5%

  • Signal price increases this time of the green note in the short term only because after disease goes down, the economy returns to normal, the confidence of investors will return. Once the disease situation is over, the USD price will still fluctuate around 1-2%/ year
  • Vietnam has the strength of huge foreign exchange reserves. Read more »
VALIDUS

Above 14%*/ year

  • High and fixed profit, minimum 14%/ year.
  • Profits do not depend on performance of the stock market, real estate.
  • Diversify portfolio with different industry companies.
  • Short investment term of 1-3 months helps to proactively invest capital.
  • 100% online transactions to save time.
  • Majority of Validus partners are less affected by the disease situation due to industry groups (Necessities, food and agriculture supply to the domestic market).

SME direct lending offers attractive risk-adjusted returns, even more so given its low correlation to the volatile equity and bond markets. As you participate in attractive lending opportunities on the Validus platform and capitalise on the higher interest rates, it also means that we can do more in backing viable SMEs so that they are well-positioned to accelerate their growth after the COVID-19 crisis.

 

Validus summary and achievements

Founded in 2015, Validus is the leading online unsecured SME lending platform in Singapore. Validus’s success is based on the application of modern financial technologies such as machine learning and artificial intelligence (AI). Following the success in Singapore and Indonesia, we have been in Vietnam to accompany the development of small and medium enterprises. Follow us on news at: Cafebiz.vn, The Saigon Times, Banking Times.

Validus received the investment and support of major investors such as Vertex Ventures, Dutch Development Bank FMO ranked AAA globally, in cooperation with Government-linked companies such as ST Engineering. In Vietnam market we are supported by Vinacapital Investment Fund and reputable partners. In Singapore market, in the last 2 years Validus Singapore has disbursed about 300 million USD with more than 7,000 loans. Small and medium businesses in our ecosystem are growing on average 20% per year.

*All interests are based on specific loan and be announced before investment.