Branch International, a financial services firm with operations in Kenya, Nigeria, Tanzania, and currently testing the Mexican and Indian markets has raised Sh350 million capital investment to further expand its services in Kenya.
This commercial paper issuance was arranged by Centum-owned capital-raising advisory firm, Barium Capital and is Branch’s second in the Kenyan market after a similar move in 2017 that saw it raise Sh200 million to bolster its machine learning-powered mobile financial products.
According to the firm, the new capital investment will be used to continue to grow Branch’s loan product offerings in Kenya.
“The rapid growth of smartphone adoption, paired with the affinity for mobile money has put Kenya at the forefront of the financial technology explosion,” said Branch Head of Global Operations Daniel Szlapak. “We’re proud that our services have seen such high adoption here and are excited to continue to build best-in-class products for Kenyan customers.”
Using an Android app, Branch helps unlock financial access for billions of people around the world. Branch’s first product offering is lending, but it plans to expand into savings and payment products in the future. Since launching in 2015, it has garnered more than a million users, disbursed more than $100 million, and has distributed more than 6 million loans. The company issues tens of thousands of loans a day in Kenya alone and continues to see high-volume growth. Worldwide, Branch expects to disburse over $250 million in 2018.
“Branch has built an absolutely first-rate operation. We have been impressed by what they’ve been able to achieve so far, and we are very happy to have secured a seat on the Branch express train for our investors.” said Teresia Muthoni, CEO of Barium Capital.
Branch’s customer-centered service offers fast, fair and flexible lending without late fees, rollover fees, or restrictions on how customers use the loan. Unlike traditional institutions, Branch gives people an opportunity to build credit despite limited banking history by assessing creditworthiness based on the data captured, with explicit permission, from customers’ smartphones. Branch’s algorithms process thousands of data points to create personalized loan options in a matter of seconds.
The company notes that their services provide working capital for hundreds of thousands of Kenyans, and data shows that nearly 70 percent of all loans are used for small business purposes.
This announcement represents Branch’s second large investment announcement in 2018. In March, the company raised a $70 million Series B investment to expand its financial offerings to additional countries.