Japan’s Mitsubishi UFJ Financial Group (MUFG) is set to invest over $700 million in Singapore ride-hailing company Grab, according to media reports.
Both MUFG and Grab will develop financial services products such as insurance and loans. The same products will be available through Grab’s mobile app.
While MUFG will oversee the app’s personal loans and insurance offerings, Grab will make use of its data on customer preferences to suggest loans tailored to specific customers.
Another reason for MUFG to invest in Grab is its strong artificial intelligence systems and data analysis skills. Leveraging Grab’s technology will prove to be beneficial for MUFG as it competes with neobanks and fintech startups in its home market.
According to reports, MUFG and Grab are expected to make the announcement soon.
The investment from MUFG comes just weeks after Grab announced it is set to acquire Bento Invest, a Singapore-based robot-advisory startup.
Through the acquisition of Bento Invest, Grab will venture into the wealth management business in Singapore. After the completion of the deal, Bento Invest will be rebranded as Grab Invest and the new products will be available in Singapore during the first half of the year. The new wealth management products will be available in the Grab app.
Recently, Grab Financial started offering loans and credit lines to small and medium-sized businesses in Singapore.
Businesses can apply online and borrow up to S$100,000 with interest rates as low as 0.7 percent per month. Grab Financial does not demand security deposits and the loan sizes are calculated based on the financial status of the businesses.
Last year, Grab launched SME lending as well as micro-insurance for drivers in Singapore.