Thailand
Thailand: KBank invests $50m in Grab
Kasikornbank (KBank) has splashed US$50 million (1.65 billion baht) for an investment in Grab, Southeast Asia’s leading online- to-offline (O2O) platform, to expand its new customer base to taxi drivers.
Beacon Venture Capital, an arm of KBank, has bought 0.45% of Singapore-based Grab Holdings in the company’s latest recapitalisation worth copy1 billion, said KBank president Patchara Samalapa.
The ride-hailing company’s Series H fund-raising was the 18th round. The investment also marks Beacon’s largest investment.
The country’s third-largest lender by assets is also partnering with Grab Thailand to offer GrabPay by KBank, a co-branded mobile payment app, and other financial solutions in the Thai market.
The partnership strategy is expected to open the bank to greater opportunities to innovate in a rapidly evolving industry and growth region.
For the initial stage of the collaboration, the bank plans to use the investment to expand to low-income earners, especially motorcycle taxis and taxi drivers. KBank plans to offer financial services to these clients, including deposits, mobile banking and digital lending.
The bank’s latest move is in line with the plan to shift its customer acquisition focus to the lower-income segment, where strong demand for financial services remains.
The digital lending service will cover both secured and unsecured loans.
Mr Patchara said the bank’s digital lending approval process for motorcycle taxi and taxi drivers will be largely based on Grab’s database, eliminating the need for financial documents such as monthly income statements from loan applicants.
For this service, the bank needs to adopt a credit scoring system that parallels the innovative channel.
“We have not set an actual growth target for digital lending in the customer segment yet,” Mr Patchara said. “With the digital-based credit scoring system, the bank will spend some time monitoring the accuracy of the innovative system.”
Based on data analytics, the interest rate charged for the loan segment could be lower than for traditional lending but will mainly depend on the risk profile of the borrower.
Despite the bank forgoing financial documents from borrowers, basic loan analysis standards and the customer’s credit record with the National Credit Bureau will still apply.
Under the collaboration, KBank and Grab have also sought the Bank of Thailand’s approval for an e-wallet business that is under consideration.
Moreover, the partnership would build up a digital lifestyle system for Grab’s users, driver-partners and merchants, as well as enhance the delivery of digital services and mobility for millions of users who rely on Grab for safe and affordable transport, food and package delivery, mobile payments, and financial services.
Tarin Thaniyavarn, country head of Grab Thailand, said the partnership would let Thais access digital payments, which are safer and more convenient than cash.
Source: https://www.bangkokpost.com/business/news/1572574/kbank-invests-50m-in-grab