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Centum subsidiary raises Sh350m for lender Branch

digital micro-loans
Kenyans turn to the digital micro-loans mainly for short-term working capital owing to their convenience. FILE PHOTO | NMG 

Centum #ticker:ICDC's capital-raising advisory firm Barium Capital has helped San Francisco based mobile loans company Branch International to raise Sh350 million for lending in Kenya.

Branch in a statement on Monday said the fresh capital– its second issued commercial paper in the Kenyan market since 2017 – will help grow its loan book.

“The rapid growth of smartphone adoption, paired with the affinity for mobile money has put Kenya at the forefront of the financial technology explosion,” said Branch head of global operations Daniel Szlapak.

Last year Branch, a Silicon Valley start-up that launched in Kenya in April 2015 and which has since disbursed more than Sh10 billion via mobile money platform M-Pesa, raised Sh200 million for the Kenyan market expansion.

The company said it plans to expand into savings and payment products in the future for its more than a million users.

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“We have been impressed by what they’ve been able to achieve so far, and we are very happy to have secured a seat on the Branch express train for our investors,” said Teresia Muthoni, chief executive of Barium Capital.

Besides Branch, there are nearly a dozen other major players in the market which issue short-term loans via mobile money.

They include commercial banks’ platforms such as M-Shwari, M-Co-op Cash, KCB M-Pesa, Equitel and Barclay’s Timiza. Besides the bank backed platforms, there are also standalone mobile lending apps such as Saida and Mombo Mobile, with Okash by Opera software being the latest entrant.

In April this year mobile lending firm Tala raised Sh6.5 billion in a fresh round of investment funding.

Kenyans turn to the digital micro-loans mainly for short-term working capital owing to their convenience.

The services rely on artificial intelligence (AI) to learn borrower behaviour. These apps issue short-term loans via mobile money and charge a processing fee.

A report by the Financial Sector Deepening Kenya, the Central Bank of Kenya and the Kenya National Bureau of Statistics shows that more than one in four Kenyans —or more than six million people — has taken a digital loan, highlighting the central role mobile lending applications play.

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