Branch To Launch Pan-African Digital Bank From Kenya Following The Acquisition of Century Microfinance Bank
Branch has outlined plans to roll out a Pan-African digital bank, starting from Kenya before going to several key African markets. At this juncture, Branch International is best known as a digital lending or mobile loans app in Kenya so it’s basically pivoting to become a digital bank. This announcement was made earlier today by Matt Flannery, the founder of Branch International Founder at the formal signing ceremony for the acquisition of Century Microfinance Bank following regulatory approvals.
Branch currently serves customers in Kenya, Tanzania, Nigeria, and India, with offices in Nairobi, Lagos, Bangalore, Mumbai, and Silicon Valley. Branch was one of several companies that pioneered artificial intelligence applications to assess credit risk in markets with poor credit bureau infrastructure and it continues to push technology to make financial services more efficient and scalable. The clearest manifestation of what Branch launched in Kenya was a mobile app that enabled users to apply for and receive mobile loans using M-Pesa, Safaricom’s dominant mobile money offering.
As of this writing, Branch has attracted global investors ranging from leading venture capitalist Andreessen Horowitz (who backed Facebook, Twitter, and other international platforms early on) to Visa and the World Bank Group’s IFC in its corporate mission to offer world-class financial services to the mobile generation. Kenya has been instrumental in enabling Branch to pursue its Pan-African digital bank vision since it offered many learning experiences for the fintech.
By acquiring Century Microfinance Bank in Kenya, Branch becomes the first digital lender to expand into the microfinance banking market which will enable it to offer deposit-taking financial services and enhanced lending for individuals and SME clients. Branch also plans to rebrand Century Microfinance Bank so that it conforms to the Branch brand going forward.
According to Mark Flannery, transforming into a digital bank will enable Branch to deepen financial inclusivity while reaching the underserved markets and the backing of the acquisition of Century Microfinance Bank by the Government of Kenya and the Central Bank of Kenya has given them the impetus to launch from here into rest of Africa. Prior to being acquired, Century Microfinance Bank had 26,000 customers in Kenya and it provided to them primarily savings accounts and credit facilities. On the other hand, Branch has managed to digitally disburse more than US$ 600 million to a growing customer base of more than 4 million customers.
A big part of Branch’s success has been its innovative algorithmic approach using machine learning to determine credit worthiness via customers’ smartphones. This tech-forward approach requires ensures transparency and trust by enabling a fair, secure, and convenient means for customers to build capital and save for the future. I am personally keen to see what Branch can and will hopefully achieve as it transitions into a fully-fledged digital bank at a time when a digital transformation has been accelerated in Kenya and the rest of Africa to the COVID-19 pandemic. What is clear though is that Branch is well poised to grow exponentially via a myriad offering across the African continent.