Grab makes foray into fintech and financial services

Anthony Tan Co-founder and CEO of Grab

In an interview with TechCrunch on the sidelines of the Money2020 event in Singapore, Jason Thompson, who is head of GrabPay, said the move is in line with Grab's focus on enabling business and income in Southeast Asia.

"I wake up every day thinking about how we are going to empower the next 100-million micro entrepreneurs by 2020", Tan told the Money 20/20 conference in Singapore.

Grab, which started as a taxi-hailing app firm and competes with Uber [UBER.UL], has been expanding into financial services over the last two years by acquiring companies and forming partnerships to spread usage of its mobile wallet.

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. This will include providing working capital loans, financing for smartphones and durable goods, and consumer goods financing. "That's the reason we're doing it", he said.

Grab, founded by Malaysian businessman Anthony Tan, said Tuesday it will use its "huge cache" of customer data from the app to provide ways to measure creditworthiness of people outside the formal banking system.

The loan capability is possible thanks to the joint venture between Grab Financial and Credit Saison, one of Japan's largest consumer financing companies.

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Grab Financial Services Asia, puts in place a much-needed infrastructure that will accelerate financial inclusion in Southeast Asia.

"Many in our region have no access to loans that they can use to purchase a new home or grow their small business", Grab said in a statement. We are excited to have a partner such as Chubb with whom we share this vision.

Grab Financial Services Asia will also explore partnering with banks and financial institutions in Southeast Asia and globally to provide other financial products, enabling these traditional institutions to unlock new opportunities in segments that they have been unable to address due to the absence of reliable credit information. 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. "We've built the largest internet platform in Southeast Asia and this is another extension of that story".

Analysts expected a boom in digital financial services in Southeast Asia, especially Indonesia, where the majority of its 250 million population do not have bank accounts.

Paul McNamee, Regional President, Chubb Asia Pacific, said, "We are delighted to work with a digital pioneer like Grab to protect their 2.6 million driver-partners".

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