• Friday, March 29, 2024
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BusinessDay

Branch reinvents into full financial service, offers 20% interest rate

Dayo Ademola

Known in Nigeria for over 3 years, largely as a digital platform that offers instant loans, Branch is reinventing itself as a full digital finance services provider. It now has a wallet feature for commission free payments, free money transfers and an investment feature that gives an annualised return of 20 percent a year.

These were some of the features highlighted during a recent media parley with Branch Nigeria executives, where it was explained that the platform is positioning itself as the preferred digital finance provider, especially for the mobile generation.

According to Branch, the quest to make formal financial services accessible at an affordable rate to individuals and businesses is critical in systematically driving economic development. Thus, their unique range of offerings are designed to offer value to customers whilst enabling them make payments and granting access to loans and investment opportunities. These product features include the free and unlimited money transfers; free bills payment and airtime purchase; a 20% annual investment returns (one of the highest in Nigeria) without any withdrawal restrictions. According to Branch, investments made through the Branch app are channeled into low-risk financial instruments with capital preservation as the ultimate goal, and; instant loans up to ₦500,000 in minutes with no paperwork or collaterals required and no late charges.

“Branch is fully licensed and regulated by the CBN, and the license permits the services being offered including fund management in this particular case,” said Dayo Ademola, managing director, Branch Nigeria, when BusinessDay sought to know how the company intends to fulfill the promised returns, considering the economic climate.

Ademola further explained that Branch invests customer funds in principal secured securities and low risk securities, so people’s funds are safe,

While returns have generally been on a decline in Nigeria, she explained there are two other reasons the company can do this. One, its investors have taken a long-term view on the business in Nigeria. Branch is supported by some of the biggest and well known global investors including Andreessen Horowitz, also known as a16z, which has invested in Twitter, Facebook and other major technology companies. Another of its investors is Visa, the global payment processor, and these investors, Ademola explained are backing the business in Nigeria to provide the best services possible.

Furthermore, the firm has been lending for 3 years already, which she says has been profitable and the firm is able to get returns from that. Also, being a tech company, it is not burdened with the requirements commercial banks grapple with such as having physical locations, staffing, providing power and security as well as other variables that make their costs structure higher.

On the other hand, Branch, which is present in India, Kenya, Tanzania including Nigeria, operates on a lower cost structure which it is able to pass on to customers, explained Ademola.

By transforming, Branch, from being a single product company offering instant loans and cash, it is now broadening its suite of products to now include a wallet which gives users the ability to initiate transactions they would typically execute on other financial service providers.

In the past three years of its operations in Nigeria, Branch says it has processed over N40bn in over 3 million loan transactions and remains one of the most downloaded financial apps in Africa. Branch is founded by Kiva.org founders, an NGO which has raised over 1.5 billion USD in 0% interest capital for global financial inclusion. For this, the founders have received global media recognition and several awards including being listed in Fortune 40 Under 40.