CROWDFUNDING platform Siam Validus, a joint venture between Validus and SCG Distribution, is the first foreign fintech firm to be granted a debenture crowdfunding licence by the Securities and Exchange Commission of Thailand (SEC).
The licence will allow Siam Validus to support small and medium-sized enterprises (SMEs) via debt crowdfunding, which is a form of peer-to-peer lending through an approved online funding portal.
Unlike equity crowdfunding, investors do not gain shares in the company and fundraisers must repay the loans with interest.
“Many SMEs in Thailand are often unable to access financing to meet cash flow needs, and are unable to shorten their cash flow cycles to capitalise on opportunities,” said Wareemon Niyomthai, chief executive officer of Siam Validus.
“We are working closely with our corporate partner to support their vendors and dealers, and with Siam Validus’ unique ability to effectively leverage technology and data, we are confident we will meet the financing needs of underserved SMEs.”
Siam Validus said it would operate with the same proprietary technology and credit-scoring systems used by Validus, which recently won the top award at the Monetary Authority of Singapore Fintech Awards 2020 for the Singapore Financial Institution category.
“The licence marks a significant milestone and paves the way for us to help drive the future of SME financing in Thailand,” noted Vikas Nahata, co-founder and executive director of Validus.
“We thank the SEC team for facilitating the process so we are able to bring best practices and a strong governance framework that’s already in place from our regional operations to Thailand,” he said.