Singapore. Grab has teamed up with Japanese credit card company Credit Saison Co to provide loans and lending services in Southeast Asia, marking the ride-hailing firm's biggest expansion into financial services.
Their new joint venture firm, Grab Financial Services Asia, will offer microfinancing products and leverage Grab's network of millions of consumers and small businesses as well as data on consumer behavior, blending it with Credit Saison's expertise in credit analysis and consumer lending.
The move comes as Tencent's WeChat Pay and Alibaba Group's affiliate Alipay expand into Southeast Asia – home to some of the world's fastest-growing economies with about 640 million people and an active mobile user base.
Financial details of the venture were not disclosed.
"Grab Financial Services Asia is building a reliable alternative to traditional credit scoring methods that is customized for the unbanked majority of consumers and small businesses in Southeast Asia," Jason Thompson, director of Grab Financial Services Asia, said on Tuesday (13/03).
Grab already offers services ranging from payments to rewards and loyalty services.
Grab operates in eight countries in Southeast Asia and says its app has been downloaded on over 86 million mobile devices. It has a network of 2.6 million drivers and offers ride-hailing, on-demand food and delivery services.
Analysts expect a boom in digital financial services in Southeast Asia, particularly in Indonesia – where the majority of its 250 million population do not have bank accounts.
"The problem in Indonesia today is that the middle economy actually has no financial services," Thompson told Reuters in an interview.
"All the things that you know so well around credit history, credit scoring, none of this is available," he said. "In the world of lending, that has to be our differentiator."
Grab is betting that its data on transport movements, geolocation, GrabPay transactions and consumer behavior will help in building benchmarks to assess customers' creditworthiness.
Credit Saison is the largest credit card issuer in Japan and has also invested in e-commerce and biometric payments.
The new venture will offer credit scoring services to financial firms who can use the information to provide other services such as virtual credit cards.
Grab, which started as a taxi-hailing app firm and competes with Uber, has been expanding into financial services over the last two years, partly by acquiring companies.
Grab also said on Tuesday that it had partnered with Chubb to offer insurance coverage to the ride-haling service's 2.6 million drivers.