Vemanti Group Inc. and Vietnam Public Joint-stock Commercial Bank today, Wednesday, September 7, 2022 announced a joint pilot digital lending program aimed at driving growth for Small and Medium-sized Enterprises (SMEs) in Vietnam.
The program includes a portfolio of nimble and innovative products collaboratively developed by both parties for the SME clientele.
The initial product to kickstart the program will be a unique financing option designed to provide small US-bound exporters—majority of which are SMEs—access to short-term loans at competitive rates. At the end of the pilot period, the full program will be available via PVcomBank branches and digital banking platform.
SMEs currently play a major role in Vietnam’s economy (US$362.6 billion in 2021 per the World Bank), accounting for more than 41% of its GDP according to the Vietnam Association of SMEs.
However, it is estimated that currently 70% of SMEs lack viable options when it comes to short-term working capital loans. This is their biggest obstacle in the course of conducting business. Growing exports and overseas opportunities only exacerbate the problem, as they often face long accounts receivable (AR) cycles of more than 2 months on the average.
The new lending program will allow businesses to borrow based on their existing trade receivables. They can use the capital to cover strategic business needs, such as staffing, operations costs, inventory, product development, and manufacturing, as well as marketing efforts to build their brand and grow their customer base.
“One of our targets is to provide quick and easy financing for the underserved SMEs that make up the majority of current economic activity and future growth of Vietnam, an attractive up-and-coming market on a global scale.
“We are thrilled to launch this program to make the opportunity of selling to US-based buyers more accessible for those businesses. PVcomBank shares our commitment to championing underserved populations of business owners, knowing they often lack access to the more traditional methods of capital.”
Tan Tran, CEO of Vemanti
Evaluation process for loans
Each loan application will be jointly evaluated and approved by both parties based on a proprietary decision-making and credit-rating system catering specifically to SMEs. The approval process is expected to take about a week for a new borrower and as little as 24 hours for a returning borrower. The program offers speed, transparency, and simplicity utilizing a digital platform that streamlines and automates parts of the underwriting and funding process.
Digital lending is now one of the hottest trends in the global banking, financial services and insurance market. However, digital lending in Vietnam is still at an embryonic stage. The program is one of the first supported by an incumbent bank in the country.
Vemanti’s objectives for the next 12 months are to grow its product portfolio through PVcomBank and to become a market leader in short-term financing for the export-driven SMEs in Vietnam. The committed partnership with PVcomBank will further solidify and propel its business objectives as the first SME-focused digital banking platform in Vietnam.
On its roadmap will also be other SME-related financial products such as business credit line, employee salary advance, PO finance, equity finance, and more. Ultimately, its goal is to have a collection of comprehensive financial products and services built around the actual needs of small businesses.
“Vemanti is on a mission to support and empower SMEs, just like us, so the partnership is a great fit. The program is the perfect place to make these kinds of financing programs available that can truly make a difference for a lot of businesses. We are thrilled to be a partner with Vemanti in helping solve liquidity challenges for Vietnamese businesses.”
Ha Nguyen, Deputy CEO of PVcomBank
Vemanti Group Inc is a financial technology (fintech) company that seeks to establish a strong foothold in the emerging and high-growth markets of Southeast Asia.
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