Grab ventures into fintech, offering microfinancing services

Once just a ride-sharing company, Grab has been expanding its portfolio to include mobile and peer-to-peer payments and now has added insurance and microfinancing services to the mix.

The Southeast Asian operator on Tuesday launched its “fintech platform”, Grab Financial, which it said would encompass its fintech offerings including payments, rewards and loyalty services, as well as financial and agent services.

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It also unveiled new partnerships with Credit Saison and Chubb, setting up a joint venture with the former to offer loans and credit assessment services.

Citing figures from World Bank, Grab said just 27 percent of adults in the region had a bank account, which made it difficult for banks to evaluate credit and risk ratings. These traditionally would require analysis of various data such as income, spending habits, existing debts, and bank account details. Without proper risk assessment, consumers might have limited access to credit, it said.

It added that the joint venture with Credit Saison would tap the Japanese consumer financing company’s expertise in credit assessment and consumer lending as well as Grab’s access to consumer data through its mobile and payment apps.

Processing more than a billion transactions a year, Grab said it could offer alternative data sources for assessing credit ratings, evaluating behaviour and transaction data such as geo-location and transport movements. These, it added, could plug gaps that traditional credit-scoring methods were unable to address.

Called Grab Financial Services Asia, the new joint venture would start by offering lending products and services for Grab drivers, agents, and merchants, including financing for smartphones and working capital loans.

It would later add credit-scoring services to its portfolio, providing financial institutes data to support their own services such as virtual credit cards.

GrabPay’s Southeast Asia managing director Jason Thompson said: “Many in our region have no access to loans that they can use to purchase a new home or grow their small business. [The new joint venture] puts in place a much-needed infrastructure…[and] 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.”

In a separate announcement, Grab also inked a partnership with Chubb to offer insurance services for its drivers. Through the ride-sharing operator’s app, drivers would be able to select an option to insure their vehicles or families for loss of income, per-ride policies, and personal accident policies, amongst others.

According to Grab, the partnership also would tap its technologies such as telematics, machine learning, and data analytics to provide insurance services that were customised for its drivers across the various Southeast Asian markets.

It currently has a network of more than 2.6 million drivers in eight countries in the region, clocking almost 4 million rides a day.

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Grab ventures into fintech, offering microfinancing services
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