Velo Labs partners with Lightnet, Visa for MSME payments solution in Asia

Velo Labs Technology, a blockchain company based in the British Virgin Islands, said it will partner with Singapore-headquartered fintech company Lightnet Group and Visa Worldwide to jointly develop a payment solutions in Asia.

Photo credit: Håkan Dahlström Photography

The three parties have signed a Memorandum of Understanding that is aimed at answering the problems of the micro, small, and medium enterprise (MSME) lending market in Asia.

“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,” said Tridbodi Arunanondchai, vice chairman and group CEO of Lightnet Group.

The partnership agreement gives all three firms access to real-time global transactions between participating banks, money transfer operators, and other financial service providers.

Velo said that the initiative aims to enable users with poor or nonexistent credit history to receive a line of credit by depositing their digital assets as collateral. It added that Velo tokens will be used as collateral for MSME customers to get loans.

The International Finance Corporation estimates that globally, the unmet financing need of of MSMEs amounts to US$5.2 trillion annually, with more than half of this financing gap existing in the Asia Pacific region.

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Velo also claims that the new payments solution would connect the region’s over one billion unbanked and underbanked individuals to the global financial system.