Micro-Lending App Branch Raises USD 3.4 Mill. Debt to further expand its services in Kenya
By Rolex Owino
In a bid to further extend its reach to a wider demographic within the East African nation of Kenya, financial services firm, Branch International, has garnered a funding sum believed to be in the region of USD 3.4 Mill. – to boost its expansion plans.
The financial services firm, which has a presence in African countries such as Kenya, Nigeria, and Tanzania, and also currently testing the Indian and Mexican markets – has benefitted from a commercial paper issuance arranged by Barium Capital, a Centum-owned capital-raising advisory firm.
The latest capital investment in the Kenyan branch of the financial services firm is the second of its kind in the Kenyan market, having seen the company initially raise around USD 2 Mill. to facilitate its machine learning-powered mobile financial products in a similar move last year. By the firm’s projections, the new capital investment will be utilised in increasing the growth of Branch’s loan product offerings in Kenya.
As reiterated by Daniel Szlapak, Branch’s Head of Global Operations, “The rapid growth of smartphone adoption, paired with the affinity for mobile money has put Kenya at the forefront of the financial technology explosion. We are proud that our services have seen such high adoption here and are excited to continue to build best-in-class products for Kenyan customers.”
By means of an Android app on a mobile platform, Branch helps billions of people around the world to access financial aid in the form of small loans that are easy to process and procure. Branch has gained significant popularity by virtue of its lending option, but going forward, plans which revolve around incorporating savings and payment products are believed to be in the pipeline. Since inception in 2015, the micro-lending company has been reported to have attracted more than a million users, disbursed more than USD 100 Mill. in loans, and processed more than six million loan applications. The lending platform also lays claim to issuing a significant number of loans in Kenya on a daily basis, while witnessing high-volume growth. On a global scale, Branch has set its sights on disbursing as much as USD 250 Mill. in the current financial year.
“Branch has built an absolutely first-rate operation. We have been impressed by what they have been able to achieve so far, and we are very happy to have secured a seat on the Branch express train for our investors,” stated Teresa Muthoni, Barium Capital’s CEO.
Inherent in Branch’s business model is a customer-centred service that promises fast, fair, and flexible lending without late fees, rollover fees, or restrictions on the manner in which the loan is to be utilised. Its loan offering is set apart by the idea of giving people the opportunity to build credit in spite of insufficient banking history or data on financial pedigree. Branch assesses and assigns creditworthiness on the backs of data captured from customers’ smartphones, with explicit permission from the customers themselves. By design, the platform’s algorithm is built to process several data points so as to create customised loans options with very little expended in the way of downtime. According to the company’s financial reports, their lending service appears to provide working capital for a significant number of Kenyans, with their data indicating a predominant uptake by small-businesses, accounting for approximately 70% of the loans issued by the platform.
The latest development represents Branch’s second large investment announcement in 2018, as it comes in the wake of a previous Series-B investment valued at USD 70 Mill., which was announced in March, aimed at extending its loan offerings and financial capabilities to more countries.
Source: African Strategic-Ventures (ASV) & Wee-tracker