Micr0-credit firm Branch has partnered cab hailing firm Uber to enable existing driver partners access an exclusive loan package from Branch in a move that will widen Branch’s customer base and see the driver-partners own and grow their businesses.
The deal will see Branch will use driver ratings and trip data for their credit worthness and issue them with loans. Drivers with over 500 trips and a 4.6 rating on the Uber App qualify for KSh30,000 as a starter loan, payable within 6 months at a fee of KSh2,172, which is equivalent to a 1.2% monthly interest rate.
According to Kagure Wamunyu, Uber’s Operations Lead in Kenya, “Uber is focussed on increasing economic opportunities. We are excited about this partnership which will enable existing drivers that are leasing their cars from partners to become driver-partners and owners of their businesses. We are excited that through Branch, driver-partners will have access to convenient and affordable credit to advance their businesses in just a few taps.”
Together, Uber and Branch will enable drivers to increase their earning capacity by providing them with the necessary capital to register their businesses and onboard their own vehicles onto the Uber app. It is anticipated that several thousand existing drivers using the Uber App will take up the offer within 2016.
The partnership comes as both Uber and Branch celebrate recent growth milestones. In May this year, Uber reached 1 million rides taken in Kenya since launching operations at the beginning of 2015. To date, Branch has extended credit to over 130,000 customers in Kenya and Tanzania. In October this year, the financial services company announced that it had reached the 500,000 loans milestone.
The new loan product actively addresses the credit shortage experienced by Kenyan entrepreneurs. The deal also gives Branch alternative data to use for credit scoring.
Daniel Szlapak, Director of Africa for Branch, “At Branch, we are using alternative data sources and proprietary machine learning technology to overcome this hurdle and make accurate lending decisions. We are delighted to be working with Uber to be able to offer this new loan product at unprecedented low interest rates and support entrepreneurs in growing their businesses.”