Grab Financial Group, an arm of super app Grab, aims to provide loans worth 3 billion baht to 100,000 households of its driver and merchant partners this year.
"After operating in Thailand for eight years, Grab has been able to ease pain points for ride-hailing services and food orders. Now we are ready to provide financial services, which are expected to record investment returns faster than ride-hailing services because of less promotional subsidies," said Worachat Luxkanalode, Thailand head of Grab Financial Group.
Grab Financial Group will rely on 1,000 data analytic sets to gauge behaviour of drivers and merchants. Grab says it is Thailand's data-driven digital lender.
Drivers and small and medium-sized enterprises (SMEs) that have partnered with Grab for at least three months will be entitled to its financial services if they receive good credit scoring.
They do not need to fill out application forms for the services.
Grab received a licence from the Bank of Thailand to provide micro-lending services through its ride-haling mobile application with maximum loans of 100,000 baht per user.
The pilot lending service started in the final quarter of last year, which saw overall lending volume of 500 million baht for more than 20,000 partners.
Users borrowed 20,000-30,000 baht on average.
Lending services under a nano-finance licence has an annual interest rate maximum of 36%, but Grab provides only a short-term loan for six months and it charges users a maximum interest rate of 18% per year.
"The current non-performing loan rate is very low and the group aims to keep the rate under 2% with daily loan repayment and short-term loans," said Mr Worachat.
Driver partners are entitled to daily instalment repayment for mobile phones worth around 10,000 baht with zero interest.
Grab purchases a high volume of mobile phones, thereby receiving discounted prices, and gains a profit from selling them to its partners at full price.
"Smartphones are essential tools for drivers," he said.
SME partners are entitled to a maximum loan of 1 million baht with an annual interest rate of 15%.
GrabFood merchants are one of its targets, said Mr Worachat, adding Grab will work with other startups that have SMEs customers in their system to provide loans.
Passengers for Grab's ride-hailing services in Singapore are also entitled to "PlayLater" service, where all Grab transactions are consolidated into a single monthly bill.
The service is being considered for the Thai market.
"We have payment and loan services, and soon will provide personalised insurance services," he said.
"Thailand still has a huge opportunity in financial and payment services as its cashless transactions account for only 5-7% of total transactions."