Branch International, a for-profit lender to 1 million mobile-phone subscribers in Kenya, Nigeria and Tanzania, recently raised USD 70 million with the goal of expanding within Africa, entering the Indian market, and launching savings and transfer services. US-based Trinity Ventures led the fundraising round, and its general partner, Schwark Satyavolu, will take a position on the board of directors of Branch. While the amounts invested by each entity have not been released, the other investors are US-based Victory Park Capital, the World Bank Group’s International Finance Corporation, US-based venture capital firm Andreessen Horowitz, and China-based CreditEase Fintech Investment Fund. Branch’s other shareholders are listed at https://www.branch.co/about.
Branch evaluates the creditworthiness of applicants by harvesting data from their phones: GPS data, contact lists, type of phone, data from social networks, and logs of calls and SMS (text) messages. As clients repay their loans successfully, “fees decrease, and you unlock larger loans with more flexible terms.” The loans range in size from USD 2.50 to USD 500 with terms of 4 to 64 weeks and monthly interest rates from 1 percent to 21 percent. Branch reports that 75 percent of its retail loans are used for entrepreneurial efforts.
Branch, which was founded in 2015, had raised USD 10 million before the current investment round. It has offices in the US, Kenya, Nigeria and India. The co-founder of Branch, Matt Flannery, also co-founded Kiva, a US-based NGO that collects loans from the public to on-lend to microfinance institutions.
Sources and Additional Resources
CreditEase press release
http://english.creditease.cn/pressroom/PressRelease/2018/0401/257.html
“Digital Financial Services: Providing a Ladder Out of Poverty or Creating Financial Exclusion?”
https://www.microcapital.org/special-report-digital-financial-services-providing-ladder-poverty-creating-financial-exclusion/
Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at http://www.microcapital.org/products-page/.
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