Velo Labs Teams With Visa, Lightnet On MSME Lending In Asia

Velo Labs has unveiled a joint effort with Visa and Lightnet Group to build out payment offerings together in Asia, according to an announcement.

Velo Labs, Visa and Lightnet Group will work together on payment offerings targeted at serving the micro, small and medium enterprise (MSME) lending market in Asia, the announcement stated. The collaboration seeks to let those who have substandard credit histories, or no credit histories, get a line of credit by putting digital assets up as collateral.

“Being new-to-credit or lacking creditworthiness is often an obstacle to achieving one’s financial goals, such as securing loans to start a business or even buying a car,” Lightnet Group Vice Chairman and Group CEO Tridbodi Arunanondchai said in the announcement. “We are providing customers from the MSME market with another pathway to build credit and improve financial wellness.”

The partnership also grows the reach of the three companies by allowing near-real-time international transactions among money transfer operators, participating financial institutions and other financial service companies.

The International Finance Corporation forecasts that $5.2 trillion in MSME lending goes unserved each year worldwide, while over half of that funding gap occurs in the Asia-Pacific (APAC) area, according to the announcement.

“This agreement is a testament to Velo Labs’ and its partners’ continuous efforts to achieve financial inclusion for millions in the under-served MSME lending market,” Velo Labs Chairman Chatchaval Jiaravanon said in the announcement. “It also illustrates Velo’s capacity as a bridge asset enabling greater financial inclusion.”

Velo Labs said its aim is to build out a Velo Protocol-fueled “Federated Credit Exchange Network.”

The news comes after the firm that built out the Velo Protocol, Lightnet, landed $31.2 million in a Series A funding round in January. The round was headed up by Seven Bank, UOB Venture Management, HashKey Capital, Uni-President Asset Holdings, Signum Capital, Hopeshine Ventures, Du Capital and Hanwha Investment and Securities.