Race is on for tech companies like Grab, Ant Financial to gain an edge in SE Asia's financial services market
- Grab’s move into financial services in Southeast Asia mirrors that of Ant Financial, Alibaba’s financial affiliate
In Southeast Asia, over 95 per cent of companies are small and medium-sized businesses, many of which find it difficult to gain access to funding. Now technology companies like Grab, Ant Financial and Tencent’s WeChat are hoping to fill the market gap by offering financial services like loans and payments.
Grab, the Singapore-based ride-sharing company that has now expanded into everything from food-delivery to mobile payments, said on Tuesday that it is making a “full-scale push into lending and insurance”, starting with its home market of Singapore.
Partners that it works with for its ecosystem would be able to take out loans with Grab and drivers, for example, would be able to pay for insurance that covers them only when they are driving.
“Drivers will be able to pay as they drive and switch seamlessly between personal and auto insurance … this lowers the effective cost of operating for drivers,” said Reuben Lai, senior managing director at Grab Financial, at a media briefing during the Money 20/20 conference in Singapore.
Lai said that SMEs and consumers would also be able to take out loans from Grab, which allows them “to move outside of the platform to buy big ticket items”.
In a push to encourage more consumers to use Grab’s ecosystem of services, it also announced its new “Pay Later” product, a service that lets users pay for the Grab services they have used at the end of the month, or in monthly instalments.