Ridesharing service Grab is closely linked to a deal to buy Uber’s business in Southeast Asia, but those rumors haven’t stopped it from building its fintech platform after announcing a financial services unit.
The Singapore-based company has been into fintech for some time, with the most visible moment being the launch of its mobile payment service last November. Today, it has further extended that by introducing micro-loans and insurance options for Grab drivers and businesses that use its GrabPay services.
For its new offerings, Grab has teamed up with Credit Saison, a $ 3 billion company that is Japan’s largest lender with some 70 million credit cards in circulation, to create a joint venture called Grab Financial Services. Asia. The American insurer Chubb has signed up as a partner.
In an interview with TechCrunch on the sidelines of the Money2020 event in Singapore, Jason Thompson, who heads GrabPay, said the move was in line with Grab’s goal of boosting business and revenue in South Asia. -East.
âToday, we have helped create around five million jobs [across Grab services]; in order for these people to grow their businesses, we need to provide them with financial services. Whether it’s nano-loans for working capital, the ability to buy a car, in fact without financial services, we’re going to restrict the business growth of this whole ecosystem. This is the reason why we are doing it, âhe said.
Rather than sending alerts to potential financial services customers through its app, Grab plans to take a community approach and promote service availability using its pilot events, agent network and other offline ways.
Credit scoring is tricky in many emerging regions as a large portion of people do not have bank accounts or do not use them regularly. In Southeast Asia, KPMG estimates that only 27% of the region’s 600 million people have a bank account. Grab plans to assess loan recipients and insurance applicants using a mix of signals that may include their driving style, which Thompson said he can track using telemetry from the device of a driver.
So while it wouldn’t be the only scoring criteria, a grab driver’s driving style could play a role in assessing whether to get a loan, Thompson explained.
Grab CEO Anthony Tan announces Grab Financial Services Asia
Grab initially focused on serving business customers, but Thompson said he may look to expand to meet consumer needs later. Already, he added, Grab has a loan portfolio of over $ 700 million through auto fundraising, insurance and more.
Grab serves eight Southeast Asian countries, but its financial services appear to favor Indonesia. The country, Southeast Asia’s largest economy, is where Grab acquired the Kudo offline payment network in a deal that sources say TechCrunch could reach for $ 100 million. .
Thompson said Grab had “refocused” the Kudo business and used it to develop Grab’s relationships with SMEs and the driver community before the introduction of financial services. He added, however, that all of GrabPay’s financial services will be rolled out across the region by the end of this year.
Grab may be a relatively new entrant to the payments space, but the company is bringing in considerable weight. Valued at over $ 6 billion with investors like SoftBank, Indonesian group Lippo and Chinese Didi Chuxing in his corner, he’ll be interested to see if Grab can use his connections with the private sector and government to build financial services. regions in Southeast Asia where, to date, most competitors have focused on single markets or subsets of countries.