The joint venture with the Japanese lender looks to provide loans and lending services to “millions of unbanked and underbanked consumers, micro-entrepreneurs and small businesses across Southeast Asia”.

SINGAPORE: The region’s ride-hailing giant Grab announced on Tuesday (Mar 13) it is going bigger into financial services, by partnering Japan’s Credit Saison to offer lending to the unbanked and underbanked within its ecosystem.

The lending service will be part of the newly announced Grab Financial, a platform which wraps all of its financial technology (fintech) offerings - payments services, rewards and loyalty programmes, financial services and agent services.



Grab's joint venture (JV) with Credit Saison will allow them to offer access to funding that is crucial to helping them grow their income streams.

Speaking at the inaugural Money 20/20 conference, Mr Anthony Tan, co-founder and CEO of Grab, cited the example of Ibu Sumiati, an Indonesian lady with a small aquarium business who is keen to expand her business to three outlets, and how the new JV - Grab Financial Services Asia - could offer her the financing she needs to make it happen.

Managing director of GrabPay Southeast Asia Jason Thompson said in a separate media briefing on Tuesday that Ibu Sumiati only has a rolling credit of funds to last 24 hours, so if a robbery happens, her business closes.

“This is not about financial services, it’s about solving problems,” said Mr Thompson. “Real, real problems.”



TAPPING ON GRAB DATA

For a start, Grab Financial Services Asia will focus on providing products to meet the needs of Grab drivers, agents and merchants such as working capital loans, financing for smartphones and durable goods, as well as consumer goods financing, the company said.

The joint venture will tap on the ride-hailing service provider’s huge cache of customer data gather from its app - these include riders’ feedback, telemetry data and insights from the Grab Rewards platform, Mr Thompson explained - to provide a “sophisticated, alternative resource for measuring credit ratings".

Using the data, combined with Credit Saison’s expertise in credit scoring, risk management and product formulation, the new entity can offer a range of lending products and services mentioned above, Grab said.

It will also offer credit scoring services to financial institutions who can use the information to provide other services such as virtual credit cards, Mr Thompson explained.

He added that the default rate for this lending business is below 1.5 per cent. “We don’t want it to go higher than that.”

The service will be rolled out this year to all the Southeast Asia markets Grab is in currently, the executive said.

CHUBB PARTNERSHIP FOR INSURANCE OFFERINGS

Besides the Credit Saison partnership, Grab also announced it is working with Chubb to offer insurance products for its drivers.

Using the Grab app, these drivers will be able to select different insurance options to protect their vehicles, livelihoods and their families should there be loss of income through accidents, the company said.

They will also explore using the ride-hailing service provider’s data and technology, such as telematics, machine learning and predictive analytics to offer insurance products personalised for specific drivers, it added.