Lender Branch has maintained a 15 per cent monthly growth since its launch as more Kenyans embrace mobile money lenders as banks curtail borrowing in the wake of interest rate capping.
The firm’s monthly loan book is currently at Sh3 billion ($3 million) with the lender receiving more than 250,000 applications for loans last month.
Branch, which offers M-Pesa loans of up to Sh50,000 via an Android application, expects the amount to grow as the number of follow-up loans borrowers rises.
“Our monthly loan book is now at around Sh3 billion and growing 15 per cent month over month. Demand for credit in Kenya continues to increase while banks are starting to curtail lending in the wake of the interest rate cap,” said Sofia Zab, marketing director of Branch.
Mobile banking apps such as M-Shwari, Equitel #ticker:EQTY, M-Co-op Cash #ticker:COOP, and KCB M-Pesa #ticker:KCB have greatly transformed how Kenyans access loans. Consumers no longer need to fill lengthy paperwork, pledge collateral or undergo vetting by a mean looking credit officer.
“Kenyans, in particular small and micro entrepreneurs, are increasingly turning to mobile lending solutions such as Branch to access loans that are fast, convenient and affordable. Our product is very sticky as we reward our best borrowers with larger loan limits and lower interest rates,” she said.
According to the latest data from the Central Bank of Kenya, the volume of cash moved through mobile money transfer platforms grew by a fifth last year to cross the Sh3 trillion mark for the first time, aided by increased uptake of mobile loans.
The data shows that Kenyans moved Sh3.35 trillion via mobile cash in 2016 compared to Sh2.82 trillion the previous year due to the rise in the number of mobile lending apps.
This means that Kenyans transacted an average of Sh280 billion in mobile-based payments per month, or Sh9.2 billion a day last year – compared to the Sh7.7 billion moved daily through the same platform in the full year of 2015.