Mobile lender with over 200,000 customers in Kenya and Tanzania, Branch has partnered with etailer Jumia to enable small-scale sellers using the platform to access credit at favourable terms in a move to help them grow their businesses and reach more customers.
The deal will see qualifying sellers access a KSh 30,000 loan which is to be repaid within 6 months at a monthly interest rate of just 1.2%, adding up to a fee of KSh 2,172. Sellers qualify for these loans based on their sales history and forecasts with Jumia. The loan is disbursed instantly through MPesa.
According to Sam Chappatte, Managing Director at Jumia Kenya, “We are delighted to be working with Branch to offer vendors on our e-commerce platform the opportunity to market their products to a nationwide audience, as well as get easy access to financing to support their online growth ambitions. This programme will promote financial inclusion in Kenya.”
The deal with Branch is a welcome move for Jumia as it means more inventory for its sellers which means more revenues for the etail platform. In December 2015, Branch raised $9.2m from Andreessen Horowitz, whose portfolio includes Facebook and AirBnB. The mobile-based financial services company has raised over $15m in equity and debt funding to date. Branch was launched two years ago, has lent out over KSh3bn lend out and offers MPesa loans of up to KSh 50,000.
“Branch envisions a world where financial services are accessible anytime, anywhere.”, concluded Daniel Szlapak, Director of Africa for Branch. “The Kenyan economy is driven by small and medium sized businesses. Through this partnership, we are using the power of data to unlock much-needed access to credit for these entrepreneurs.”
With these partnerships, Branch’s next step would be students, chama groups and other platform users such as OLX to grow its customer base. Branch uses its proprietary machine learning algorithm that analyses 2000 data points from applicants’ phones. Branch borrowers take out an average of 8 loans each and comprise of entrepreneurs and salaried employees with a side business, with 75% of loans going towards a business purpose.