Expanding Business Coverage, Grab Launches Three Financial Services

Not only being a ride-hailing startup, Grab is now a challenger to fintech and banking. On-demand service startup Grab Holdings Inc extends its business scope to the financial sector through its Grab Financial business unit. Three financial services have been launched, namely loans, micro-investment and PayLater for payments in e-commerce.

Grab Financial Managing Director Reuben Lai said financial services were offered because companies saw high demand in Southeast Asia regarding financial products or features. “Research has shown that there is a real demand for the financial products we are launching,” Reuben said, quoted by TechCrunch, Tuesday (4/8).

For loans, Grab offers products provided by partner banks on its platform. This loan feature will be available in Singapore at the end of the year. Grab claims that the disbursement of funds can later be done within two to four days after the loan application is approved.

Grab’s Head of Financial Services, Ankur Mehrotra, explained that the company will focus on providing productive loans for businesses that are integrated with its platform, which are not yet fully accessible by banking services. Ankur noted that there are at least 300 million people who have no credit history in Southeast Asia.

Therefore, Grab makes loan services with low-interest rates ranging from 0.8% to 1.5% depending on the risk profile of the loan applicant. According to Ankur, this interest rate is lower than the interest offered by banks.

Grab offers products provided by GFG-licensed bank partners to serve the daily loan needs of users such as Grab partners and others. This service will be available in Singapore at the end of the year and will continue to various other Asian countries.

Grab also Provides Investment and Paylater Services

While an investment service called AutoInvest is designed to make it easy for users to invest in all Grab ecosystems. Through AutoInvest, users can invest from the smallest amount, namely 1 Singapore dollar per transaction with a return of around 1.8% per year, which will be transferred directly to the user’s GrabPay electronic wallet.

For this investment service, Grab collaborates with Fullerton Fund Management and UOB Asset Management. AutoInvest is planned to be released in September 2020 and can be used immediately by users.

While for PayLater service, Grab plans to hook online e-commerce partners to offer it. Through this service, Grab users can shop by paying after the goods or services are used. PayLater services are arguably the trend of millennial interest. In Indonesia, similar facilities are also available at large application companies such as Gojek, OVO, Tokopedia and Traveloka.

Grab Has Previously Secured Investments to Develop Financial Products and Services

For information, in July 2020 Grab was reportedly in talks with the bank to raise funds of up to US$ 500 million or around IDR 7.4 trillion. Previously, the Grab Financial unit was also reportedly looking for an investment of US$ 300 million or around IDR 4.55 trillion since the beginning of this year.

The fresh funds will be used to strengthen the brand so that Grab Financial can operate independently. Grab itself has received funding of US$ 850 million or around IDR 11.84 trillion earlier this year from Japanese investors, namely Mitsubishi UFJ Financial Group Inc and TIS Inc.

This additional capital is used to provide financial services that can be accessed by consumers in Southeast Asia. The largest bank in Japan, MUFG invested US$ 706 million or around IDR 9.84 trillion, while TIS invested US$ 150 million or IDR 1.46 trillion.

Under a partnership with MUFG, Grab develops financial products and services based on insights from analyzed customer data. Then Grab and TIS will improve digital payment infrastructure in Southeast Asia and Japan.