Great Eastern invests $98m in venture with Malaysian telco Axiata

Axiata's headquarters in Kuala Lumpur. Great Eastern will get a 21.875 per cent stake in the venture, which will fund the expansion of Axiata Digital's financial services business over the next year in Malaysia and the region.
Axiata's headquarters in Kuala Lumpur. Great Eastern will get a 21.875 per cent stake in the venture, which will fund the expansion of Axiata Digital's financial services business over the next year in Malaysia and the region. PHOTO: REUTERS

Great Eastern has tied up with Malaysian telco Axiata to invest in its regional digital financial services business.

The Singapore-based insurance and financial services giant is pumping in about US$70 million (S$97.5 million) for a 21.875 per cent stake in the venture with Axiata holding the rest.

The new venture will fund the expansion of Axiata Digital's financial services business over the next year in Malaysia and the region.

This includes financing its plans to develop its ecosystem of merchants and customers, and enhancing Axiata's micro-financing and micro-insurance Aspirasi's credit-scoring technology.

Besides the 7.5 million users and over 700,000 merchants in Malaysia and Indonesia, this will also stretch into other markets like Bangladesh.

Axiata Digital, which is part of the multi-national Axiata Group, said there is rising demand for digitisation, a process that is expected to grow exponentially following the Covid-19 crisis.

Customers and merchants expect better protection measures, along with affordable and more flexible financing solutions to respond to tough economic conditions, it said.

Great Eastern chief executive Khor Hock Seng said the investment will enable the insurer to participate in Axiata's growing fintech expansion plans in the region.

"While we have always been actively looking out for suitable investments in the region, we have been selective and consider those which complement our strategic direction of leveraging digital to enhance our distribution reach with a focus on core markets of Singapore, Malaysia and Indonesia," he said.

Mr Khor added that Axiata's focus would be on providing financial services for the under-served, unbanked and under-insured customer segment, and in line with GE's business strategy.

"The partnership with Axiata Digital will allow us to reach out to untapped customer segments in these markets," he added.

A version of this article appeared in the print edition of The Straits Times on June 27, 2020, with the headline 'Great Eastern invests $98m in venture with Malaysian telco Axiata'. Print Edition | Subscribe