Validus Capital steps into Indonesia, its first Southeast Asian market beyond Singapore

There’s a huge demand for loans in Southeast Asia’s most populous country.

Validus Capital, a Singapore-based peer-to-business (P2B) lending platform that targets small and medium enterprises (SMEs), has set up shop in Indonesia through its subsidiary Batumbu, in partnership with Indonesia’s Triputra Group.

Batumbu connects SMEs in Indonesia with accredited, institutional, and high net worth investors to provide loans for business growth. While Batumbu will use a platform similar to that of Validus to develop scoring systems for SMEs seeking financing, its operations will be localized. For instance, Batumbu’s credit algorithm will be adapted and tailored to fit the needs of entrepreneurs in Indonesia.

In February, during a closed-door media roundtable session where Validus announced its closing of a SGD 20.5 million (USD 15 million) Series B round led by Dutch public-private development bank FMO, the company also spoke about the importance of entering the Indonesian market.

Indonesia is the first country that Validus has formally expanded into beyond its home base. There’s plenty of demand for lending services in Southeast Asia’s most populous country.

SMEs are a key contributor to Indonesia’s economy, yet the lack of access to financing limits their growth, which is why borrowers flock to P2P lending platforms in Indonesia. According to estimates by Indonesia’s Financial Services Authority (OJK), P2P lending platforms disbursed a total of USD 1.14 billion in loans in 2018, marking 681.25% year-on-year growth.

The team at Batumbu consists of individuals with significant experience in SME banking and entrepreneurship. At the helm is Sonny Christian Joseph, who has over 23 years of experience in SME banking in Indonesia and was previously the head of SME Banking in BTPN. BTPN is a foreign exchange bank in Indonesia that specializes in funding low-income segments, including pensioners as well as owners of micro, small, and medium enterprises (MSMEs). It also provides funding services for the mass market.