The tech arm of ride-hailing firm Grab has revealed more details about its strategy to become a leader in the region's online financial sector.
The Grab Financial unit is rolling out a checkout system for e-wallet GrabPay, credit services for customers and more insurance options for its drivers, its senior managing director, Mr Reuben Lai, said yesterday.
"We are doubling down on our financial services offering for micro-entrepreneurs," he added.
"This is a huge untapped opportunity for Grab Financial to support the region's entrepreneurs who are less able to access traditional financial institutions."
Asean has more than 630 million people, of which about half are under 30 years old.
There has been a rapid adoption of fintech innovation in the region, given increasing mobile and Internet penetration, as well as the under-served small and medium-sized enterprise (SMEs) and consumer markets, professional services firm EY said in a report.
Investment in the region's fintech sector has surged, jumping 45 per cent from 2016 to US$366 million in 2017, noted the Asean FinTech Census 2018 report.
Mr Lai said Grab can stand out by leveraging "our scale and data insights to bring financial services to market at a more competitive price point than anyone else".
He added that the Grab app has served more than nine million micro-entrepreneurs over the past six years.
SMEs contribute more than half of Asean's gross domestic product, he said, but two out of three cited business funding and financing as their biggest problem.
Mr Lai added: "Lending is where our data is instrumental in assessing creditworthiness."
The Straits Times reported earlier this month that Grab is offering loans of up to $100,000 to companies under its latest business initiative.
Grab Financial uses both traditional and non-traditional metrics to determine a loan applicant's creditworthiness, Mr Lai said.
"In Singapore, where we have access to traditional metrics such as financial statements from (the Accounting and Corporate Regulatory Authority) and credit bureau information, we use that," he noted.
In countries where such data may be scant, Grab uses non-traditional metrics such as drivers' productivity and stability of earnings.
Metrics for food merchants include the number of deliveries they make and how popular they are.
Singapore FinTech Association president Chia Hock Lai said: "It is a common strategy for successful platforms to expand into complementary domains like what Grab is doing (with financial services)".
A challenge is for the technology company to adapt to and serve local needs, he added. "Asean is not a homogenous market and will pose challenges in localising offerings to suit local conditions while maintaining benefits of scaling."
Consumers, however, will benefit from Grab's venture: "They will get more choices and... more competitive pricing as local players will respond to new entrants."