Capital markets

Branch targets workers in concert with loans as part of expansion campaign


From left to right: Peterson Mwangi, President of Century Microfinance Bank, Rose Muturi, Managing Director of Branch International Limited for East Africa, Florence Muchiri, CEO of Century Microfinance Bank, and Matt Flannery, Co-founder and CEO of Branch International. PICTURES | DIANA NGILA | NMG

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Summary

  • Gig workers include independent contractors, online platform workers, contract business workers, or temporary employees.
  • Branch said it will also offer savings and investment services, money transfers and bill repayment as it seeks to grow as a digital bank in the region.
  • Branch, which also has operations in Tanzania, Nigeria and India, plans to replicate the products offered in other Kenyan markets.

Digital lender Branch International will provide loans to construction workers in Kenya following its acquisition of Century MFB, a local microfinance bank.

Gig workers include independent contractors, online platform workers, contract business workers, or temporary employees.

Branch said it will also offer savings and investment services, money transfers and bill repayment as it seeks to grow as a digital bank in the region.

”As a fintech, we were only allowed to do one product – microcredit. In space, the amount you can lend is limited because the risks are inherent depending on the credit policy you are allowed. After seven years, we felt we could do more and enable customers to borrow more,” said Rose Muturi, Managing Director of Branch East Africa.

“From the basics of banking and through the license available from Century, we will be able to offer services to our customers including savings, bill paying and investing.”

Branch, which also has operations in Tanzania, Nigeria and India, plans to replicate the products offered in other Kenyan markets.

The deposit license offered by Century MFB will allow it to extend its services beyond short-term loans of 500 shillings minimum and 150,000 shillings maximum.

It will be the first digital lender to expand into the microfinance banking market, enabling depository financial services.

Branch acquired an 84.89% majority stake in Century, gaining access to its two branches – Moi Avenue and Gikomba in Nairobi – which focus on SMEs and have 26,000 accounts

Branch said it hired three other microfinance banks before settling on Century, based on years of operations, capital adequacy ratios, market strategy and governance structures.

Entities are still in the onboarding process and have not yet found a name they will use.

“These are the details that we are reviewing today with different teams, including the technology and co-banking teams, to ensure customers are moving forward without disruption,” Ms. Muturi said.

In January, the Treasury exempted the mobile lender from being subject to a rule prohibiting ownership of more than 25% of microfinance capital.

In a notice in the Official Gazette, Branch was exempted from Section 19(1) of the Microfinance Act for a period of four years – from January 1, 2022 to December 31, 2025.

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