Branch is among the most popular lending apps in Kenya giving you fast, convenient, and unsecured loans.
Branch International, the lending firm, has announced that it has received Ksh 350 million capital investment which will be used to expand its financial services in the country. The investment is based on a commercial paper issuance that was arranged by Barium Capital, a capital-raising advisory firm owned by Centum.
This is not the first time the company has issued commercial paper in the Kenyan market. In 2017, the company raised Ksh. 200 million through another commercial paper issuance.
Since entry into the country in 2015, Branch has experienced exponential growth over the years and that it has so far disbursed more than $100 million, distributing more than 6 million loans. Currently, the lending app has over 1 million users in Kenya. By the end of 2018, Branch hopes to disburse Ksh. 2.5 billion across its markets.
Speaking on financial innovation, Branch Head of Global Operations Daniel Szlapak noted that the rapid penetration of smartphone use, coupled with mobile money has put Kenya at the forefront of the financial technology explosion.
Teresia Muthoni, CEO of Barium Capital described Branch as a “first-rate operation”. She expressed the company’s pride in its achievements so far including attracting investors.
The new vs. the old
Traditional lending models mostly involve a time-consuming offline process. The winds have changed sides over the last couple of years. The incumbent (read banks) no longer dominates the lending sector. Loan apps are quickly becoming the disruptors and enablers.
This is is partly because most traditional service providers do not have products specifically tailored for today’s small loanee who want instant loans. This explains the rising popularity of loan apps such as Branch, Tala, Saida.
The explosive growth of mobile internet and the increasing popularity of digital banking has changed the existing banking ecosystem and is expanding consumers’ access to credit.
Branch and other loan apps are quickly becoming the go-to financial solution for small business owners or individuals seeking access to small amounts of money within a short period of time. Loan app services are instant and this is crucial for that small business owner who may need money to restock or expand operations.
Lending apps such as Branch are revolutionalizing the lending services. Though they still have a long way to go because a section of the population still depends on traditional and offline processes, the paradigm shift has clearly begun and is gaining momentum over time.
M-Swari, Safaricom’s banking product that allows M-Pesa customers to save and borrow money through their phones, uses a different model but is a major competitor of these apps. This may be because of the Telco’s large subscriber base.
Some banking apps e.g. the Equity’s Eazzy Banking and MCOOPCASH giver users the option to access loans but looking at their download numbers, it is prudent to say that top loan apps are more popular.
If banks wish to survive the storm, it is imperative that they leverage the technological innovations by either partnering with the new-age startups or creating own stand-alone lending apps. With this, the banking industry will be on its way to creating a diverse and stable credit landscape.
Banks are still important lenders since they still have a hold on big loanees. However, to reclaim or attract small borrowers they will need to partner with or learn from the new innovators.
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