If you have never heard of Branch, pay attention. Branch is a mobile lending app, founded in 2015, that offers loans of up to Ksh.50,000 through its Android app. The app builds a credit score of the user by analysing their M-Pesa usage and over 2,000 data points on the customer’s phone. Once the customer’s credit worthiness is determined, the user can now enjoy Branch’s services.
The company has announced that they have so far disbursed 1.5 million loans to a total of 350,000 Kenyans who use the app. Even more interesting is that Branch loans out about $4 million (Ksh.400,000,000) every month to its customers.
Branch’s CEO, Matt Flannery, said, “We’ve seen fantastic growth at Branch because we know what our borrowers expect from their financial partner: they want speed, transparency and convenience.We are disrupting the existing lending space by making credit available at the tap of a button, within minutes of downloading the app – no paperwork or collateral necessary.’’
According to the company, this exponential growth has been spurred by its unique policy of offering lower interest rates to customers who have reached higher credit limits, thereby encouraging repeat uptake. Branch has also spread its wings to neighbouring country Tanzania, where they report that they have been scaling at a rate of 30-percent month on month since the beginning of the year.
Branch has also been working with other companies in the country to create exclusive loan offers, as part of its “radical approach to financial services”. Branch leverages the partner company’s data to supplement its credit scoring model and in November 2016, Branch offered Ksh.30,000 loans to Uber drivers thanks to this model.
In May, a similar partnership was announced with Jumia Kenya, whereby working capital loans are provided for merchants on the online shopping platform.