Comment: Isn’t Grab’s cash advance program a loan program?
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But there are good reasons for this type of loan to be done in a regulated framework. In fact, the Department of Justice imposed new regulation, a new self-exclusion system and new loan limits for pawn shops last year.
I want to give Grab the benefit of the doubt as they have indicated that the program is limited to a small group of partners.
As someone involved in social entrepreneurship programs, I fully support the growth of a business like Grab, which can address unmet needs by leveraging the use of technology and data, and plan to pursue a digital banking license.
But as a caring society, we need to look out for each other, especially those who work in the odd-job economy.
The Justice Department said it was seeking further information on the program and would work with relevant agencies to verify applicable legislation, if any.
This attention from the authorities is welcome. If it is in fact a loan, Grab should be regulated in the same way as other licensed loan companies.
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While the authorities’ complaints-waiting approach is wrong to be pro-business and has been applauded by start-ups and companies trying new business models to serve society in new ways, the concern is whether such a policy towards disruptive companies with huge market share and influence on the lives of many workers needs to be rethought.
While a company with big FinTech ambitions can get away with money lending functions without needing a license to operate, it’s unclear what kind of precedent Singapore, as a financial hub, is in. creating.
Jonathan Chang is a startup investor, government advisor and speaker on entrepreneurship and innovation. He received a social entrepreneurship grant from raiSE (Center for Social Enterprise).