Grab to launch retail investment product, consumer loan platform

GRAB'S financial services arm, Grab Financial Group (GFG), is rolling out a micro-investment product and a third-party loan platform for its users.

The investment product, called AutoInvest, will allow users to invest sums as low as S$1 while spending in Grab's ecosystem. This comes after Grab announced the acquisition of Singapore-based robo-advisory startup Bento in February, which allows the group to offer retail wealth management solutions.

Users in Singapore choose how much they want to invest per Grab transaction. The money is invested into fixed income funds offered by Fullerton Fund Management and UOB Asset Management.

The returns of an estimated 1.8 per cent per annum will be cashed out to users' GrabPay wallet. Fees charged by managers of the underlying funds will be reflected in users' in-app portfolio performance; these fees will work out to less than 0.45 per cent per annum.

The invested sum can then be withdrawn at any time, with no penalties, to spend on Grab services or at any merchant accepting the GrabPay Card. Grab does not charge any transaction fees for investing in the AutoInvest solution.

AutoInvest, which will be launched in early September, is not capital guaranteed.

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Meanwhile, under GFG's consumer loan platform, users will have access to personal loans offered by licensed bank partners. Bank partners and GFG will integrate their application programming interfaces so users can securely apply for the loans directly within the Grab app.

The third-party consumer loan platform will be launched in Singapore later this year. GFG will disclose the list of licensed bank partners in due course.

GFG's "buy now, pay later" line of offerings will also be expanded on select e-commerce sites in Singapore and Malaysia in October. Eligible users will be able to shop online and pay in interest-free monthly instalments, or defer their payment to the following month.

Grab currently offers loans to merchants and micro-entrepreneurs. Together with its Indonesian e-wallet partner Ovo, it has close to 400,000 outstanding loans and financing solutions across consumers, drivers and merchants in the first quarter of 2020.

On the insurance front, GFG will rollout its first hospitalisation insurance plan for consumers in Indonesia in the coming months. Since April 2019, more than 13 million insurance policies have been issued by Grab's consumer insurance business.