[Transcript] #68: Branch - From Kiva to providing consumer loans and FinTech services across Africa and other developing markets
Transcript for podcast originally recorded in September 2023
😉 In September 2023, we explored the story of Branch, the fintech lending company. Branch is a San Francisco-based fintech company that provides mobile lending services primarily in Africa, offering quick, small loans to individuals through its app.
The company uses alternative data from mobile phones to assess creditworthiness, enabling it to extend credit to users with little or no formal credit history.
Branch operates in several African countries, including Kenya, Nigeria, and Tanzania, and aims to improve financial inclusion by offering accessible financial services. Its business model focuses on low-cost, high-frequency loans with the potential for users to increase their borrowing limits over time.
Branch has a strong and long-standing founding team, has raised significant capital to build a solid war chest, and is diversified across multiple geographies, including massive markets like India and Nigeria. However, they face intense direct competition in all regions, the constant threat of new entrants given the nature of the lending business, and the looming risk of government regulation that could disrupt their operations. I wish them well 😉
Companies discussed: Branch, Kiva, Kuda Bank, Chipper Cash, Earnin, Paga, FairMoney, MFS Africa, GTBank, Access Bank, Ecobank, PalmPay, Carbon, PiggyVest, Upstart, Tala, Visa, Mastercard & Safaricom
Business concepts discussed: Smartphone credit assessment, Consumer lending, neobank strategy, Personal Finance OS, unbanked population, smartphone credit assessment & Pan-African Banking
Olumide Ogunsanwo
Personal: Website
Afrobility Podcast: Stories and analyses of African technology companies (Website, Listen: Apple podcasts, Spotify & Google podcasts & Read: Substack Newsletter)
Adamantium Fund: African B2B fund focused on education, health, finance, food and transportation (Website & memo)
Firedom Book: Financial Independence stories of African Immigrants (Website, Substack Newsletter & Buy: Print, eBook or Audiobook)
Transcript starts here
[00:00:00] Olumide Ogunsanwo: Today, we're going to talk about Branch, the fintech lending company. We'll explore theri story across the following five areas: One, African Lending Consumer Credit. Two, Branch's founding and early history. Three, product & monetization strategy. Four, competitive position and potential exit options. Fifth, s overall outlook. This episode was recorded on September 10th, 2023.
Branch is a lending company that provides microloans after assessing creditworthiness using smartphone data to customers in Kenya, Nigeria, Tanzania, India and other developing countries.
Basically, a vanilla lending company.
[00:00:35] Bankole Makanju: If you're in Nigeria or Kenya, you know them as a neobank because they have microfinance banking licenses there. So Branch is a Francisco based lending credit led neobank.
[00:00:47] Olumide Ogunsanwo: I'll talk about definitions. This is one of my least favorites, but let's do it. In corporate speak, Branch is a for profit socially conscious company that uses the power of data science to reduce the cost of delivering financial services in emerging markets. It sort of makes sense, but not very clear. I don't know why they need to say they are socially conscious, but there you have it.
[00:01:07] Bankole Makanju: When I was researching for the podcast, I noticed articles with press releases syndicated in multiple different outlines. One of my favorites has this intro: Tt might be called branch, but this bank has no branches.
[00:01:26] Olumide Ogunsanwo: Poetry.