Grab Thailand plans to extend loans worth up to 1 million baht to its merchants to capitalise on digital lending opportunities, aiming for profitability for a second consecutive year in 2023.
According to the "eConomy Asia 2023" report by Google, Bain and Temasek, digital lending in Thailand in 2023 is estimated at US$12 billion, up 65% from 2022, with average growth from 2023-25 at 31%, reaching $21 billion in 2025 and $65 billion in 2030.
"The company expects to be profitable for a second consecutive year and paid corporate tax for the first time amid a challenging economy," Worachat Luxkanalode, country head of Grab Thailand, told the Bangkok Post.
After a decade of operations, Grab Thailand finally achieved profitability in 2022, making it the first ride-hailing and food delivery service in Thailand to escape the red ink.
One of the factors contributing to its success is high spending users who account for 50% of revenue, thanks to its subscription base that can retain users.
Mr Worachat said given the global economic landscape, shaped by the impact of war and inflation, the Thai economy has a slower growth trajectory, around 3%, according to a report by research house Krungthai Compass on Oct 5. He said this slowdown has affected various industries, including food merchants and restaurants.
According to a recent survey conducted among Grab's merchant partners, 57% of restaurant operators are seeking cash loans to enhance their liquidity for daily operations, while over 25% require funds for business expansion.
In response to the needs of these merchant partners, Grab Thailand has introduced such loan products for juristic merchant partners for the first time, featuring a maximum credit limit of up to 1 million baht with an instalment period of six months and a minimum interest rate starting at 1.25% per month with no additional fees.
Additionally, Grab has expanded 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. The loan offers a maximum interest rate reduction of 2.08% per month with no additional fees.
"We believe that these endeavours will help enhance their competitiveness, ultimately strengthening the entire ecosystem," said Mr Worachat.
This strategic initiative is designed to enhance their liquidity and facilitate business expansion, particularly amid the volatile global economy.
He said financial inclusion for the underbanked and those with limited access to financial services is at the core of Grab's mission.
One of Grab Thailand's flagship offerings is "Quick Cash Loans" for individual merchant partners, introduced in 2020.
"Designed to support restaurant operators, particularly small and medium-sized enterprises and small to medium-sized food merchants facing constraints in accessing financial services, the loan offering is tailored based on their business potential and transaction data derived from our platform," he said.