Branch International, one of Kenya’s top digital financial services provider and Africa’s most popular financial app, is announcing their largest commercial paper issuance to date, raising Ksh500 million. This is the third time the financial services firm has issued commercial paper, following a Ksh350 million issuance in 2018 and a Ksh200 million issuance in 2017. All commercial paper issuances have been arranged by the Centum-owned advisory firm, Barium Capital. This latest investment will be used to continue to expand Branch’s services in Kenya.
Since launching in 2015, Branch has established itself as a key player in Kenya’s digital lending space. They are also a leading digital financial services provider in Nigeria, Tanzania, and Mexico, and will launch in India this year.
Branch’s approach to commercial paper issuance has been largely groundbreaking. It was one of the first early-stage technology companies to successfully raise debt in the local market.
Speaking after the close of the issue, Teresia Muthoni, the Managing Director of Barium Capital said, “We continue to be impressed by Branch’s approach to credit management despite the very competitive Kenyan mobile lending space which for us remains the fundamental test of issuer quality. This, coupled with the caliber of Branch’s leadership team, is what has allowed the firm to access the private capital markets much earlier than other companies in their industry and position themselves for the spectacular growth they’ve achieved to date.”
Previously, the firm garnered more than Ksh7.1 billion from top international investors, including the World Bank Group’s International Finance Corporation and Andreessen Horowitz. The latter is one of Silicon Valley’s top venture capital firms, whose previous investments have included Airbnb, Instagram, and Facebook.
In addition to the new capital, Branch is also announcing that it has now issued its 10 millionth loan in Kenya. This is a key milestone for the firm, whose mission is to expand financial access to the 70% of customers worldwide who, according to the World Bank, are underserved by traditional financial institutions. Branch issues tens of thousands of loans per day and has disbursed more than Ksh25 billion in Kenya. According to customer surveys, most Branch loans are used for small business start-up costs and ongoing business investment.
“It’s very exciting to be serving millions of Kenyans and providing them with access to essential financial services,” commented Daniel Szlapak, Head of Global Operations for Branch. “The huge growth and success in the Kenya market has positioned the company for strong global expansion,” he added.
Unlike traditional institutions, Branch gives people an opportunity to build credit despite limited banking history. Branch leverages best-in-class data science to unlock financial access for people around the world while keeping costs and default rates low. Its algorithms process thousands of data points to create personalized loan options in a matter of seconds. The firm’s first product offering is lending, but it plans to expand into savings and payment products in the future.
Branch’s customer-centered service offers fast, fair and flexible lending without late fees, rollover fees, or restrictions on how customers use the loan. A for-profit socially conscious company based in Nairobi, San Francisco, Mumbai, Mexico City, and Lagos, Branch uses data science to dramatically reduce the cost of delivering financial services in emerging markets. Founded by the pioneers of microlending and with leaders with deep finance and technology expertise, Branch has raised more than $100 million in investment from top-tier firms including Andreessen Horowitz, Trinity Ventures, IFC, Victory Park Capital, Barium Capital, 8.vc, Khosla Ventures and CreditEase. www.branch.co
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