FPT Capital has formed a partnership with Novaon Internet Group to connect start-up companies in Vietnam with foreign investors from Japan and Korea. Under the agreement, FPT Capital will help Novaon's internally developed start-ups complete documentation to connect with overseas investment funds. Novaon and FPT Capital will also provide advice and assistance to start-ups in Vietnam during their seed funding stage and introduce start-ups to backers when they are ready to seek capital investments. FPT Capital manages over $242 million in assets and may establish a venture fund focused on early-stage Vietnamese start-ups and SMEs if the market outperforms expectations.

1. Money18August 15-21, 2016
By Trang Nguyen
FPT Capital, the asset man-
agement arm of FPT Corpo-
ration, has formed a
partnership with Novaon In-
ternet Group with the aim of
connecting foreign in-
vestors from Japan and
Korea with start-up compa-
nies in Vietnam.
Both parties, upon sign-
ing the memorandum of un-
derstanding last week, will be
active in screening young or
early stage start-ups in need
of funding and support, to
grow.
“Within the context of our
agreement, our internally de-
veloped start-ups have been
guided by FPT Capital in
steps to complete our docu-
ments, in a bid to connect
with Korean and Japanese in-
vestment funds,” said No-
vaon chairman and CEO
Nguyen Minh Qui. “We are
in final talks to seal some
deals and we will be an-
nouncing them soon.”
In addition, according to
Qui, Novaon and FPT Capital
will work closely with start-
ups in Vietnam offering ad-
vice and assistance during the
seeding stage.
Qui added that FPT Capi-
tal will play a vital role intro-
ducing the start-up compa-
nies to backers when they are
ready to seek capital invest-
ment.
Novaon, which also man-
ages its own start-ups fund of
$5 million, financially sup-
ports and mentors a number
of projects, including the
launch of the online tourism
resource Bookin.vn in 2014;
and the free healthcare en-
quiry app Udoctor, dubbed
the Uber for healthcare, in
2015.
FPT Capital, meanwhile,
has been managing some
$242 million in assets, in-
cluding the joint venture be-
tween FPT and SBI Holdings
Inc., the Vietnam-Japan Pri-
vate Equity Fund, worth $100
million, and the FPT Capital
Trust Vietnam Balanced
Fund. The former invests in
state-owned enterprises en-
route to be equitised and
start-ups in ICT; while the
latter focuses on government
bonds, equity securities and
mutual funds listed on local
stock exchanges.
FPT Capital chairman
Ngo Thanh Hai, SBI Hold-
ings, whose business fields
stretch from financial and in-
vestment services to bio-tech-
nology, places a clear focus
on the rapidly growing Asian
markets and has a fondness
for Vietnamese start-ups.
Hai said, “We have been
contracted by SBI to look
into developing start-ups and
fintech firms to invest in, and
in Japan SBI recently set up a
$100-million fintech venture
fund.
“Should the Vietnamese
market outperform our expec-
tations, FPT Capital may well
establish a venture fund with
a focus on start-ups in their
early stage as well as develop-
ing SMEs,” Hai added.n
FPT and Novaon invest in
young start-up companies
By Thanh Xuan
Agricultural insurance remains
a risky business, with the gov-
ernment once again rejecting
pleas to restart a pilot scheme
for poor farmers which cost in-
surers huge losses.
The Ministry of Finance
(MoF) once again has showed
hesitation in restarting the pilot
agricultural insurance pro-
gramme, which was stopped in
the second half of 2014 after
three years of losses for
providers. This implies the
MoF and participating insurers
recognise the business is still
not viable in the country.
In response to Bac Lieu
province’s request for a contin-
uation of the pilot scheme,
Minister of Finance Dinh Tien
Dung said, “We need to work
closely with the Ministry of
Agriculture and Rural Develop-
ment to standardise a number
of criteria on contract terms and
conditions before piloting
again.”
The initial trial between
2011 and 2014 covered 20
provinces and included domes-
tic insurers such as Bao Viet In-
surance Corporation, Bao Minh
Insurance Corporation and
Vietnam Reinsurance. It was
stopped after the insurers in-
curred massive losses.
It was reported that after
three years of implementation,
total premiums collected were
just VND394 billion ($17.99
million) while the compensa-
tion paid was nearly twice as
high, at VND712.9 billion
($32.5 million). Fisheries insur-
ance accounted for the largest
portion, with VND218.1 billion
($9.96 million) in premiums
and VND675.9 billion ($30.86
million) in compensation.
Under the programme, the
state subsidised 100 per cent of
insurance fees to poor farmers
engaged in agricultural produc-
tion, 80 per cent of insurance
fees to nearly poor farmers, and
60 per cent to other farmers.
Outside the pilot scheme,
local insurers also provided a
small number of agriculture-
based packages, “but we need
to consider each contract very
carefully before we sign,” said
Ho Hai Dang, Bao Minh Insur-
ance’s deputy head of agricul-
tural department, adding that it
is notoriously difficult to find
a re-insurer for contracts of
this type.
Bao Viet Insurance was
forced to cease all fisheries in-
surance products “due to
tremendous losses,” said their
salesperson.
Notably the local agricul-
tural insurance market saw the
participation of just one inter-
national company, with
Groupama Vietnam, a sub-
sidiary of a French insurance
company, joining the field.
“The situation faced by
many insurers today while tap-
ping into the potential of the
agriculture sector is similar to
what we faced in the past. We
made a loss of approximately
700 per cent during 2001-2005
before diversifying our busi-
ness to other non-life prod-
ucts,” said Nguyen Xuan
Phuong, head of Groupama
Vietnam’s compensation de-
partment.
Experts said that there is
faint hope for a market surge in
the near future. “Agricultural
production in Vietnam is small
and fragmented while natural
disasters and epidemics are fre-
quent, which is very risky to in-
surers. Farmers also do not
have the habit of buying insur-
ance, unless they are subsidised
by the government,” assessed
Phung Dac Loc, general secre-
tary of the Association of Viet-
nam Insurers.
Groupama’s Phuong be-
lieves the main reason for the
losses were the inability to
measure and control risks.
“Vietnamese households en-
gaged in agricultural produc-
tion rarely follow standardised
technical requirements, which
often leads to crop failures,”
Phuong told VIR.
MoF said that agricultural
insurance is a new, complex
type whose policy mechanism
is still incomplete. Attempts at
standardisation are further
complicated by the variety of
climactic conditions between
Vietnamese provinces.
“Insurance companies may
need more time to work on their
policy regulations to ensure
profit,” MoF’s Dung said.n
Insurers shy away
from agriculture
Within the context of
our agreement, our
internally developed
start-ups have been
guided by FPT
Capital in steps to
complete our
documents, in a bid
to connect with
Korean and
Japanese investment
funds.
- Nguyen Minh Qui
Novaon chairman and CEO
“
Fisheries insurance products brought tremendous losses to insurers Photo: Le Toan
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