Branch International raises Sh350m; plans to expand Kenyan services

Branch International has announced a Sh350 million capital investment to further expand its services in Kenya.

Branch International commercial paper issuance was arranged by Centum-owned capital-raising advisory firm, Barium Capital​. ​This marks the second time the San Francisco headquartered technology company has issued commercial paper in the Kenyan market. In 2017, Branch raised Sh200 million through a commercial paper issuance.

Branch is a machine learning-powered provider of mobile financial products to new markets. The company’s services 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. The new capital investment will be used to continue to grow Branch’s loan product offerings in Kenya.

Branch has experienced exponential growth in the Kenyan market. 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 is also a popular financial service in Nigeria, Tanzania, and is currently testing the Mexican and Indian markets.

“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 in a press statement. “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.”

Speaking after the successful close of the fundraise, Teresia Muthoni, CEO of Barium Capital said, “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.”

The move by Branch International to expand its services into the Kenyan Market comes at a time when the African market has seen accelerating rates of smartphone adoption in recent years.

In fact, GSMA Intelligence recently predicted that there will be more than 400 million new smartphone connections in Sub-Saharan Africa by 2020, bringing the mobile install base to more than half a billion users. Kenya is leading this shift.

Last year, ​Quantum Global Research Lab reported that nearly 60 percent of Kenyans have a mobile banking account and receive 90 percent of remittances through a mobile device.

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 who is also an alumnus of Nairobi Garage, uses its own algorithms to 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.

Branch was one of the first financial technology companies to raise debt in the Kenyan market, reflecting strong market confidence in their business. 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.

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