Startup Circle: How is Branch Personal Finance App delivering financial services to the mobile generation in emerging markets?

While the economy is showing slow signs of growth, job markets are a long way from recovering. What Indians need, with the idea of entrepreneurship is an institution that can disburse loans in small amounts. “Traditional institutions like banks and micro-lenders approve loans based on a potential user’s credit history and credit scores (in addition to having to submit collateral and other forms of security),” states Matt Flannery, Co-Founder and CEO, Branch Personal Finance App.

The Branch app, on the other hand, is a problem-solver for a growing, young middle-class population that does not have sufficient credit history to avail financial help. Read Matt Flannery talk about his FinTech startup that aims to deliver world-class financial services.

1. What is Branch App all about? Tell us about the team.

Branch is on a mission is to deliver world-class financial services to the mobile generation in emerging markets. Founded in 2016, we currently operate in four countries - Kenya, Nigeria, Tanzania and India. They have offices across San Francisco, Lagos, Mumbai, and Bangalore. Branch was founded by Mathew Flannery and Daniel Jung. Before Branch, both founders worked with Kiva.org.

Globally, Branch has over 23 million downloads with a 4.3 Rating of 4 million borrowers issued over 20 million loans amounting to 500 million dollars/3700 Crore Rs. We have a team of 120 people working across three continents with 40 employees in India.

For consumers, it is the easiest way to get loans upto Rs 50,000 regardless of one's credit history. Users can choose flexible loan amounts and payment terms with no rollover or defaulting fee and get the loan into their account within 2 hours. As a company, Branch has created an algorithmic approach to determine credit worthiness via customers' smartphones. With no paperwork or red tape, our approval process is quick and allows people to get loans upto Rs.50,000 and get their credit report for free, regardless of their banking history.

Branch applies AI to the smartphone usage and data (including Handset Opportunity, Attribution Channel, Social Network Data, National Databases etc) of a potential borrower to assess applications and create tailored loan offers for each customer.

2. How did you come up with the idea?

After the success of Kiva.org which operated in over 100 countries, we were keen on bringing financial independence to the emerging markets. Traditional institutions do not cater to the lower-middle-class population with limited credit history. At Branch, we're also building a new frontier of finance - where banks aren't physical, paperwork is obsolete, and possibility is the end game. We are building a full-service digital bank. By launching new products in addition to lending, we will forge long-lasting relationships with our customers, who are the aspiring middle class.

3. What is your business/market growth?

In India, Branch has over 2 million loans and disbursed over 1.21 Billion INR in loans. With borrowers in all 30 states, Branch is expecting a 10X growth in 2021. We currently also provides free unlimited credit reports (in partnership with CIBIL). In the coming financial year, we will expand our service to include salary loans, check out credit, wallets, bill payments and savings.

4. Who are your consumers?

Branch caters to anyone who is looking for accessing fair and easy loans. The majority of the users we cater to in India are men in the lower-middle-class segment from Tier 1 and 2 cities. These are the users who generally do not have access to help from traditional institutions. Further, they have little to no credit history.

5. What are your Post-Covid plans?

We are already on the Post-Covid trajectory of growth. We are opening up lending in all markets gradually. India for instance has seen the highest number of app users to date. We will also be looking at complimenting lending and credit score monitoring with other higher-value products.

6. About the Funding

Branch has raised over $100 million from Andreessen Horowitz, VISA, International Finance Corporation and more.