Japan’s MUFG Bank is investing up to 80 billion yen (close to S$1 billion) in Singapore-based ride-hailing company Grab, Nikkei Asian Review reports.
Although a date has not been set, the partnership will soon be announced officially by both MUFG and Grab.
MUFG and Grab to develop “super app” offering finance, payment and ride services
Nikkei reveals that this deal was formed to further the growth of both companies in Southeast Asia, and will offer “new services such as lending and insurance through smartphone apps.”
As Japan’s largest bank, MUFG will take a several per cent stake in Grab to become the largest shareholder among other financial institutions investing in the ride-hailing company.
This investment will be completed by mid-2020, Nikkei reports.
Although reports online vary, Grab is apparently trying to build a “regional super app” whereby customers are offered a range of finance, payment and ride services, said Bloomberg.
As inferred from Nippon, this “super app” is likely to be built upon Grab’s existing app.
According to Nikkei, MUFG will supervise the app’s personal loans and insurance offerings, while Grab will use its data on customer preferences to suggest specifically tailored loans, for instance.
As Grab will require help in collecting loans and screening the creditworthiness of borrowers, MUFG will offer assistance by discussing regulatory approval with the financial officials of several Asian countries.
When asked by Mothership to confirm the above statements, a spokesperson for Grab declined to comment.
MUFG treats Southeast Asia as region with strong growth potential
According to Nikkei, many people in Southeast Asia do not have bank accounts.
In Indonesia, this figure does not even reach 50 per cent, while the rate in countries like Vietnam and the Philippines is close to 30 per cent.
MUFG’s partnership with Grab will not only give it access to over 166 million Grab users but also help the bank grow its presence in Southeast Asia as its domestic market slows down, Bloomberg reports.
MUFG to tap into Grab’s strong AI systems and data analysis skills
As MUFG competes with more online banks and IT startups in the Japanese market, they are also interested in tapping into Grab’s “strong artificial intelligence systems and data analysis skills.”
This move follows other financial giants and tech companies who have partnered to accumulate consumer data.
Examples include Apple and Goldman Sachs collaborating to launch a credit card, and Google partnering with Citigroup to launch a checking account service.
As of 2020, Grab is worth an estimated S$14 billion and now operates in these eight Southeast Asian countries: Singapore, Malaysia, Indonesia, Philippines, Vietnam, Thailand, Myanmar, and Cambodia.