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Grab expands into lending in Southeast Asia via new venture

Reuters  |  SINGAPORE 

By and Anshuman Daga

SINGAPORE (Reuters) - Southeast Asia's has teamed up with Japanese credit card company to provide in the region, marking the ride-hailing firm's biggest expansion into

Their new joint venture firm, Asia, will offer and leverage Grab's network of millions of consumers and small businesses as well as data on consumer behaviour, 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 expand into Southeast - 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.

"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," Jason Thompson, of Asia, said on Tuesday.

already offers services ranging from payments to rewards and

operates in eight countries in Southeast and says its app has been downloaded on over 86 million It offers ride-hailing, and delivery services through its 2.6 million drivers.

Start-ups and Indonesia's Go-Jek have raised hundreds of millions of dollars and boast an estimated valuation of $6 billion and $5 billion, respectively.

"You can imagine these guys much like WeChat in China, you can imagine them beginning to move into more and more adjacencies until such time as your Go-Jek or your app becomes your primary application that you do a range of services through," said James Lloyd, Asia-Pacific

Analysts expect a boom in digital in Southeast Asia, especially - where the majority of its 250 million population don't have

"The problem in today is that the middle economy actually has no financial services," Financial's Thompson said 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."

is betting that its data on transport movements, GrabPay transactions and consumer behaviour will help in assessing customers' creditworthiness.

A and study late last year forecast that Southeast Asia's would exceed $200 billion by 2025, from an estimated $50 billion in 2017.

Grab, which started as a taxi-hailing app firm and competes with Uber, has been expanding into over the last two years, partly by acquiring companies.

The company says it has facilitated over $737 million in loans over that period for drivers and agents, with a default rate of less than 1.5 percent.

Grab's new venture will offer credit scoring services to financial firms who can use the information for services such as virtual credit cards.

(Reporting by and Anshuman Daga; Editing by and Muralikumar Anantharaman)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Tue, March 13 2018. 16:24 IST