Branch MFB, Kenya’s 1st Neo-bank and Solv Kenya, a full-stack B2B marketplace for micro, small and medium enterprises (MSME), have entered into a strategic partnership to extend loans, business development support and market linkages to Kenyan MSMEs.
The deal will see Branch offer loans of up to Ksh 1 million ($6,000) from its Ksh 300,000 limit ($1800) without collateral. Before the partnership, Branch was offering loans from Ksh 500 to Ksh 300,000 for 1 – 12 weeks at interest rates of between 17% – 35%, depending on your loan option and repayment history. Branch MFB will provide loans and working capital of up to Kshs. 1 million for MSMEs on Solv Kenya’s platform, facilitating their cash flow and stock financing from suppliers and distributors.
According to Branch East Africa Managing Director Rose Muturi, “Access to credit facilities and business support is key to unlocking the full potential of our MSMEs. The partnership is a significant step forward in achieving this goal. By combining our expertise, we will provide Kenyan entrepreneurs with the comprehensive support they need to scale their businesses and contribute to a more vibrant Kenyan economy.”
With Solv Kenya, Branch MFB has access to a wide variety of borrowers ranging from food, consumer goods, construction, alcoholic beverages, animal feeds, electronics, airline and travel who can now obtain stock financing from Branch MFB through the Solv digital platform.
Solv Kenya is a B2B marketplace for micro, small and medium enterprises (MSMEs) in Kenya powered by the Standard Chartered Group and facilitates commerce in a trusted environment while also providing access to finance and business services for small businesses.
The partnership goes beyond simply providing instant digital loans to enterprises, Branch said but about empowering MSMEs with market linkages and support to build sustainable businesses and contribute to Kenya’s economic growth.
MSMEs are important contributors to economic growth in Kenya, constituting 98% of all business entities in the country. The sector remains highly informal, as only 20% of the over 7.4 million MSMEs operate as licensed entities. The partnership will provide significant embedded financing solutions for these MSMEs that are often excluded from the formal economy.
African Lead SC Ventures and Chief Executive Officer Solv Kenya Dan Karuga said the partnership enables them to de-risk lending to MSMEs while opening them up to a diversified portfolio across various supply chains.
“This partnership is a perfect alignment of our technological expertise and a testament to the power of collaboration in driving innovation and growth in Africa’s digital economy. We are confident we will unlock new capital streams for SMEs, enabling them to scale efficiently. Together, we aim to reach out to more MSMEs and offer them convenient and affordable credit solutions that suit their needs,” Mr. Karuga said.
The sector provides enormous opportunities for socio-economic transformation, absorbing low-skill and economically excluded individuals, such as women, persons with disabilities, and those with low levels of education.
Founded in 2015 in Kenya, Branch is a digital finance app providing access to instant loans and other digital banking products across Africa and Asia. Branch serves customers in Kenya, Tanzania, Nigeria and India, with offices in Nairobi, Lagos, Bangalore, Mumbai and Silicon Valley. It’s mission is to provide world-class financial services for the mobile generation.
Branch pioneered the use of artificial intelligence to assess credit risk in markets with poor credit bureau infrastructure. Branch continues to push technology to make financial services more efficient and scalable – and pass savings onto customers.
Branch is backed by visionary global investors, ranging from Andreessen Horowitz, Visa, the IFC among others.
In March 2022, after the merger and acquisition of Century Microfinance Bank, to become Branch Microfinance Bank as part of Branch International’s strategy to become a Pan African Digital Bank.