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Grab to expand into S-E Asian markets, offering loans and financial services

SINGAPORE — Months after launching its electronic payment platform GrabPay, Singapore-based ride-hailing firm Grab is making another foray into the financial technology (fintech) space to offer loans and other financial products and services.

SINGAPORE — Months after launching its electronic payment platform GrabPay, Singapore-based ride-hailing firm Grab is making another foray into the financial technology (fintech) space to offer loans and other financial products and services.

On Tuesday (March 13), it announced a joint venture called Grab Financial Services Asia with Japanese credit card company Credit Saison.

Its target? The “millions” who are not served or “under-served” by traditional banking institutions in South-east Asia, be they small business owners, micro-entrepreneurs or consumers.

The new platform will cater to drivers first, offering lending services for vehicles and mobile phones, and working loan capital, for instance. It would then be expanded to agents and then to consumers.

Grab — which operates in Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam — plans to launch the suite of fintech services in South-east Asian markets within this year.

It has more than 86 million users and more than 2.6 million drivers across its network, and already offers services ranging from payments to rewards and loyalty services.

In the last few years, the firm has facilitated US$737 million (S$966 million) in vehicle loans and micro-loans over that period, with a default rate of less than 1.5 per cent.

Mr Jason Thompson, managing director for GrabPay, said that for micro-lending services under the joint-venture company, the interest rates would be “market competitive”, but did not give details.
The new platform will also offer credit-scoring services that can be used by financial institutions to create new products such as virtual credit cards.

The latest move is a “natural growth for us”, Mr Thompson said, and a “natural order of business”.
The rich data on consumer behaviour that Grab has collected through its network means that “logically” and “in future”, the new platform will move to consumers, he added.

In South-east Asia, China’s Tencent and Alibaba Group have rolled out their digital payment systems WeChatPay and Alipay respectively, to cash in on the growth of the region’s emerging economies and the hundreds of millions of people who are active mobile phone users.

On whether the roll-out of the new financial services will detract the business from its core focus, Mr Thompson said that Grab’s payment service, for example, stemmed from the needs of its taxi-business platform: “I don’t think we are distracted at all... We are focused. This is that extendedness of the business.”

For the joint venture, the firm is “talking actively” to more than 60 financial institutions connected on its platform, he also said.

“Everything that we do is to provide sustainability in our business. The business has grown in a very, very tight and economically viable way.”

The set-up for the new financial services platform is unlikely to separate the company into parts because “we are stronger together”, he stressed. “The way we work today is a close, close collaboration. The only way we can be so nuanced, in particular to our drivers, is to work with our transport business.”

In a separate announcement on Tuesday, Grab also said that it has partnered insurance company Chubb to offer insurance products to Grab drivers, including car insurance, loss of income protection and personal accident policies.

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