Grab, the ride-hailing company based in Southeast Asia, announced news on Tuesday (March 13) that it has teamed up with Credit Saison Co., one of Japan’s largest consumer financing companies, to provide loans and lending services to the unbanked.
In a press release, the companies said the service is aimed at the millions of unbanked and underbanked consumers, micro-entrepreneurs and small businesses located across Southeast Asia. Dubbed Grab Financial Services Asia (GFSA), the joint venture will offer micro-financing products and services tailored for the fastest-growing economies in Southeast Asia.
According to Grab, central to the new joint venture is the ability for the company to gather and analyze alternative data points on consumer behavior, which can then be used to develop credit and risk assessments. By analyzing behavior and transaction data from the Grab app — including transport movements, geolocation and GrabPay transaction data — it can provide alternative data points to assess creditworthiness, which fills the gap left by the traditional credit scoring systems.
The ride sharing firm said only 27 percent of adults in the region possess a bank account, making it hard for banks to assess consumers’ creditworthiness when underwriting loans and restricting access to credit for consumers in Southeast Asia.
“The new joint venture, 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. GFSA 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, which will create economic opportunity for millions across the region,” said Jason Thompson, managing director of Grab Financial and director of Grab Financial Services Asia, in the press release.
The joint venture will offer a range of lending products and services and will focus initially on meeting the needs of Grab drivers, agents and merchants by providing working capital loans and financing for smartphones and consumer goods, Grab said. It also plans to create a credit scoring service that will be offered to financial institutions.
“Grab is one of the most trusted and widely used platforms in Southeast Asia, with millions of people relying on the app every day, which gives it a highly valuable insight on consumer behaviour in real time. This partnership opens up so many possibilities for Credit Saison, for Grab and, most importantly, Southeast Asia’s unbanked and underbanked, and we are excited to get started,” added Hiroshi Rinno, CEO of Credit Saison, in the same press release.