Validus Group, a digital SME financing platform based in Singapore, has secured a total of US$17.57 million in debt financing from both Oikocredit and FMO to support small and medium-sized enterprises (SMEs) in Indonesia.

Oikocredit has announced a EUR 2.4 million (US$2.57 million) loan which matures in 2027 to Validus, marking its first fintech loan in Southeast Asia.

This funding will enable Validus’ Indonesian subsidiary, Batumbu, to expand its reach and support more local businesses.

The collaboration between Oikocredit and Validus aims to address the significant SME funding gap in Indonesia, where many small businesses struggle to access funds from commercial banks due to data and risk issues.

Reza Perazi Armadi, Director and Deputy CEO of Batumbu, said,

“The partnership with Oikocredit marks a significant milestone in our efforts to bridge the SME financing gap in Indonesia.

 

With Oikocredit’s support, Batumbu will be better positioned to offer tailored financing solutions to underserved SMEs across multiple provinces of Indonesia, where banking presence is often thin, driving financial inclusion and fostering entrepreneurship. Together, we aim to create a lasting impact on the Indonesian economy.”

In a separate development, FMO, the Dutch entrepreneurial development bank, has provided a US$15 million facility to Validus.

FMO has been an investor in Validus since 2019, and this new debt financing aims to support the underserved segment of MSMEs in Indonesia.

Through Batumbu, this collaboration seeks to bridge the financing gap faced by SMEs, driving economic growth and sustainable development in the region.

“Partnering with FMO marks a significant step forward in our mission to address the SME financing gap in Indonesia.

 

With FMO’s support, Batumbu can expand its reach and offer more tailored financing solutions to SMEs, driving innovation and entrepreneurship. Together, we are committed to creating a lasting positive impact on the Indonesian economy.”

said Glant Saputrahadi Tan, Director and CEO, Batumbu.

Batumbu has been profitable for over two years, maintaining EBITDA margins above 50%. Its parent company Validus has disbursed more than US$ 3.5 billion in loans to small businesses across Southeast Asia since its inception in 2015.

Featured image credit: Edited from Freepik

The article first appeared on Fintech News Singapore