Worachat Luxkanalode, Thailand Country Head of Grab Financial Group, said, "The past year has proven to be a challenging time for MSMEs, particularly drivers in the transportation service who have been directly impacted by the decrease in international tourists, and restaurant operators who needed to quickly adapt to changing consumer behaviors. Utilizing data-driven insights from our partners' daily interaction with the Grab application, Grab Financial Group is committed to delivering more affordable financial products and relief measures that effectively meet the economic challenges and financial circumstances of these MSMEs."
In late Q1 2020, Grab Financial Group assisted driver- and delivery- partners who use the lending service by leveraging on data from Grab's platform to offer targeted relief measures, namely a grace period of both principal repayment and interests for those severely impacted. The group also continued to provide lending services to partners amidst the overall drop in new lending across the financial industry*. Later in January 2021, Grab introduced a cash loan product for merchant-partners to support them in increasing financial liquidity during the period with dine-in restrictions. This helped merchants lower fixed-cost burdens and expand their businesses to timely meet market demands.
In addition to Grab's ability to deliver these short-term solutions, Grab Financial Group also continues to leverage data and technology to develop more affordable and accessible loan products in response to the rapidly changing needs of each individual driver- and merchant-partner. "Throughout 2020, we noticed a drop in the number of rides as a result of people staying home and some driver-partners who normally provide transportation services with cars (either GrabCar or GrabTaxi) have opted to deliver food and packages to access alternative sources of income. Therefore, we must look closely at the data available to us to adapt our product offerings accordingly," added Worachat.
Grab Financial Group's enhancement of its lending product and service offerings to meet the specific needs of partners included:
- Expansion of loan offerings for driver- and delivery- partners: Expanded lending services for driver- and delivery-partners to cover all provinces in which Grab operates, and expansion of the variety of smartphones and electronic appliances available through instalment payment services. The service covers the brands and models that partners need to help them most easily earn a living and maintain their livelihoods.
- Introduction of new lending products for merchant-partners: Launched the cash loan product for merchant-partners in January 2021 to provide a source of funds for working capital and increasing liquidity to overcome the crisis. Grab also plans to launch daily electronic appliance financing for merchant-partners within June this year, to support restaurant entrepreneurs in the business expansion and ease the burden of electrical appliance investment for their business development.
Worachat further stated, "Daily repayment plans remain the key feature across all of Grab Financial Group's lending products and the major factor that make our offerings uniquely placed to serve MSMEs' needs. As most MSMEs usually earn their incomes on a daily basis, saving up money to repay their debts on a monthly basis can feel like a burden, while a daily repayment plan as well as fair and affordable interest rates make the task more manageable and reduce reliance on loan sharks. Moreover, we provide them with a convenient, fast and transparent experience by offering eligible driver-, delivery- and merchant-partners with pre-approved credit, which they can customize their loan amount and repayment period via the application, without having to submit additional documents. Then, the money will be transferred to their accounts within one day. In addition, by offering zero-percent interest rate for across instalment payment products, Grab Financial Group aims to provide a financial service feature, which is usually offered to only credit card holders, to MSMEs in Thailand."
"Grab Financial Group's approach in delivering lending services for the past two years reflects our mission to uplift people's livelihood through flexible financial technology that is accessible via Grab's platforms. We are committed to using data-driven insights to strengthen our business operations and adjust our approach accordingly to continue providing MSMEs the most relevant and useful financial services aligned with their specific needs, which are key factors in helping them overcome the crisis," concluded Worachat.
*According to the Bank of Thailand, loan for consumption offered by commercial banks in 2020 expanded at 4.6%, (a drop from 7.5% in 2019).
Source: FleishmanHillard Thailand