Grab Thailand to offer million baht loans to tap into digital lending

Grab Thailand is set to offer loans of up to 1 million baht to its merchants to tap into the growing digital lending space, with ambitions to achieve profitability for a second consecutive year in 2023. The move comes as digital lending in Thailand is expected to reach US$12 billion in 2023, a 65% increase from 2022, according to the eConomy Asia 2023 report by Google, Bain and Temasek.

Worachat Luxkanalode, the country head of Grab Thailand, revealed upcoming plans for the Southeast Asian ride-hailing and food delivery platform.

“The company aims to be profitable for a second consecutive year and has paid corporate tax for the first time, despite the challenging economy.”

In 2022, Grab Thailand marked its first profitable year in its decade-long operations, making it the first ride-hailing and food delivery service in Thailand to move out of the red. This success can be attributed to high-spending users, who constitute 50% of the company’s revenue, bolstered by a robust subscription base.

Worachat also pointed out that the global economic landscape, moulded by the repercussions of war and inflation, has resulted in a slower growth trajectory for the Thai economy, around 3%, as per a report by research house Krungthai Compass. This slowdown has affected various industries, including food merchants and restaurants.

A recent survey among Grab’s merchant partners revealed that 57% of restaurant operators are seeking cash loans to boost their daily operation liquidity, while over a quarter need funds for business expansion, reported Bangkok Post.

To cater to these needs, Grab Thailand has rolled out loan products for juristic merchant partners for the first time, offering a maximum credit limit of up to 1 million baht with a six-month instalment period and a minimum interest rate starting at 1.25% per month, without any extra charges.

Moreover, the company has increased the credit limit for personal loans for individual merchant partners to 750,000 baht, up from 500,000 baht, and extended the instalment period from six to nine months. These loans offer a maximum interest rate reduction of 2.08% per month, again with no additional fees.

Worachat believes that these efforts will enhance the competitiveness of their merchant partners, thereby strengthening the entire ecosystem, especially in light of the volatile global economy.

Underscoring financial inclusion for the underbanked and those with limited access to financial services as a core part of Grab’s mission, Worachat highlighted one of Grab Thailand’s flagship offerings – Quick Cash Loans for individual merchant partners, launched in 2020.

“These loans, designed to support restaurant operators, particularly small and medium-sized enterprises and small to medium-sized food merchants facing constraints in accessing financial services, are tailored based on their business potential and transaction data derived from our platform.”