EDITIONS
Quick News and Updates

Ridesharing service Grab is expanding into lending and insurance

Spandan Sharma
13th Mar 2018
Add to
Shares
80
Comments
Share This
Add to
Shares
80
Comments
Share

Singapore-based Grab made headlines a few days ago when it announced the launch of GrabCycle, its venture into the bike-sharing space. This is the latest in Grab’s attempts to expand beyond the ridesharing space and establish an ecosystem in Southeast Asia that covers a range of verticals, notably digital payments and mobile apps. Now, in the latest such expansion, the company has announced Grab Financial, a consolidation of existing and new financial services that will see it expand into the lending and insurance businesses for the first time.

Jason Thompson, Managing Director, GrabPay at the Money2020 event in Singapore. (Image: Grab)

Based on reports, Grab Financial will have five major divisions/verticals: GrabPay, the company’s existing digital payments platform, GrabRewards, the rewards and loyalty programme, GrabBenefits, an in-app service that offers an overview of all discounts and offers available to Grab drivers, and two new verticals – loans and lending services, and insurance. Grab has said that the platform is currently to be focussed exclusively on the company’s business customers – chiefly its various drivers – but there may be a general consumer-focused version sometime in the future.

Speaking about the launch to various platforms, Jason Thompson, Managing Director, GrabPay, said, “Today we’ve helped create about five million jobs [across Grab services], for those people to grow their businesses, we need to provide them with financial services. Whether that’s nano-loans for working capital, the ability to buy a car, actually without financial services we’re going to restrict the business growth of that whole ecosystem. That’s the reason we’re doing it.” He further added, “Many in our region have no access to loans that they can use to purchase a new home or grow their small business. GFSA (Grab Financial Services Asia) is building a reliable alternative to traditional credit scoring methods that is customised for the unbanked majority of consumers and small businesses in Southeast Asia, which will create economic opportunity for millions across the region.”

Grab has partnered with Credit Saison, a Japan-based lending firm that is likely the country’s biggest lender, with a worth of $3 billion and around 70 million credit cards in circulation. The two have set up the joint venture (JV), Grab Financial Services Asia. US-based insurer Chubb is also signed on as a partner. Grab is present across eight countries in Southeast Asia and has an existing loan book worth over $700 million because of prior campaigns for car financing, insurance, and more such facilities. It is also backed by some of the most powerful investors in the region, like SoftBank, China’s Didi Chuxing, and Indonesia’s Lippo Group, and can bring their vast resources to bear in its push into financial services.

A Google and Temasek joint study in late 2017 forecast that Southeast Asia’s internet economy would likely grow to be worth more than $200 billion by 2025, from an estimated $50 billion in 2017. However, the region is also notoriously difficult for financial services providers to crack, on account of low ownership and usage of bank accounts; a 2016 KPMG study estimates that only 27 percent of the region’s 600-million-strong population has a bank account. It will be interesting to see how Grab plans to use its resources to capitalise on Southeast Asia’s potential while solving problems unique to the region, such as difficulties in establishing accurate credit scores.

Report an issue
Add to
Shares
80
Comments
Share This
Add to
Shares
80
Comments
Share
Authors

Related Tags