This man introduces Singapore’s first SME lending platform providing investor protection

It has crossed $6.3m in loans originated in the past 6 months.

Small and medium-sized enterprises (SMEs) are an important segment in Singapore but the lending environment remains unfavourable. According to the Singapore Business Federation National Business Survey conducted at the end of 2015, 56% of SMEs expect more expensive bank loans to be the top financing issue this year. Entrepreneur Yash Poddar also argues that aside from high bank cost, traditional lending models of due diligence are adding to the hassle.

"Traditional lenders, such as banks, rely on previous models of due diligence that may not provide a full 360 degree view of potential lenders. This forces rejected SMEs to either approach moneylenders, who have punishing rates of interest, or to abandon plans to grow their business,” said Yash.

Believing that growth-oriented companies should be able to source financing without obstacles, rewarding well-run companies with competitively priced credit, he founded Validus Capital last year. It is a Singaporean SME loan origination platform that brings together Singaporean SMEs with accredited global and Singaporean investors.

For quality SME borrowers, it facilitates a source of funding at reduced interest rates, for invoice financing as well as working capital requirements. It promises of using cutting-edge technology to minimise the cost of financial intermediation, and passes on the benefits to both investors and borrowers.

Yash serves as the director of Validus Capital, and sits on the board of his family business, RKBK, a multi-generation business that has been in petroleum distribution for over 100 years.

Previously, Yash has served as founding president of Entrepreneurs Organisation (EO) – Kolkata Chapter as well as president of Young President Organisation (YPO) - Kolkata Chapter. Currently, Yash serves as Honorary Consul of Paraguay.

“In the last year, Validus Capital has shown steady growth. We have built a strong risk assessment algorithm for SMEs in Singapore, announced our partnership with the Credit Research Initiative team at the NUS, and partnered with an insurance company to secure our investors against borrower risk. In the last 6 months of our platform going live, we have already crossed SGD 6.3 million in loans originated. We recently signed our first global institutional investor, to partially fund the loans through the platform,” comments Yash.

How does it work?

Yash boasts that Validus Capital has developed a unique triple layer of due diligence, setting them aside from their competitors.

First, they are the first SME-focused platform to work with Professor Jin-Chuan Duan and his team at NUS’ Credit Research Institute, enabling them to take advantage of their world-class mathematical modelling to uncover a forward-looking Probability of Default of Singapore SME borrowers.

Secondly, Validus Capital extracts and shares smart data from their alliances with credit bureaus, which are then cross-referenced against their own, 150-point due diligence check on the financial health of the business and the Directors / Partners. They have created a behavioural assessment module for the key man.

Lastly, Validus Capital has become the first platform in Singapore and the second in Asia to have a blanket insurance for Invoice Financing loans for Investors.