Lockdown builds Krungsri portfolio
Staying at home is making consumers rely more heavily on online, particularly the food delivery business, and Bank of Ayudhya’s (BAY) lending service for Grab users is reaping a windfall.
The bank’s digital lending for Grab users has been successful, part of a cooperation with the app last month to provide loans through a pilot project, said Thakorn Piyapan, head of digital banking and innovation at BAY.
Loan demand is positive, in line with strong growth in online business as consumer behaviour changes, pushed by the government’s lockdown policy to contain the coronavirus outbreak.
“Most of the digital loan borrowers are new clients to Krungsri [BAY’s brand]. Initially, we expect to see 100,000 lending accounts within 12 months after starting operation,” he said.
The bank has three categories for the Grab project: users, drivers and merchants. Its digital lending service will be extended to Grab drivers and merchants later this year.
Krungsri First Choice, BAY’s personal loan business unit, is scheduled to introduce Grab-First loans in two months.
BAY, the country’s fifth largest bank by assets, has taken part in its parent Mitsubishi UFJ Financial Group’s (MUFG) investment in Singapore-based tech unicorn Grab through BAY’s corporate venture capital arm, Krungsri Finnovate.
MUFG recently announced investment of US$706 million in Grab, the leading ride-hailing giant’s platform in Southeast Asia.
Grab and BAY leverage alternative data and AI technology to build credit-scoring models, providing digital loans to the underbanked in Thailand.
Mr Thakorn said online business has seen significant growth following the outbreak, with user numbers of Grab rising 30%; Food Panda 100%, partly due to low-base effect; Netflix 20%; and e-books 100%. Users of marketplace platforms are also on the rise.
Online activities have jumped 10% thanks to new online clients.
While Gen Y represents the biggest slice and the highest growth area for online shopping, baby boomers also grew 10% for online shopping, especially the food delivery category.
Wirawat Panthawangkun, senior executive vice-president of Kasikornbank (KBank), said the bank’s digital lending service, which uses data analytics from Grab’s data, has received a good response from Grab drivers, the bank’s new market segment.
The bank’s digital lending offers credit lines ranging from 7,500 to 100,000 baht per Grab driver.
The service’s total loans remain small compared with the bank’s retail loans and KBank needs to gain more understanding about data and customer segments to expand digital lending in a sustainable way, said Mr Wirawat.
“Loan demand from the food delivery business using Grab’s database has increased during the pandemic,” he said.
“Both the economic downturn and the boom in ride-hailing and food delivery businesses bolstered loan demand.”
KBank, the country’s largest lender by assets and biggest mobile banking service provider, entered a partnership with Grab in November 2018.
‘‘ Gen Y represents the biggest slice and the highest growth area for online shopping. THAKORN PIYAPAN Digital banking head, BAY