While there is a lot being said and done about getting banking services to the unbanked, not much is being said about those who already have access to one financial product but are still being denied access to the rest.
Managing Director of Branch Nigeria, Dayo Ademola was a guest on the Nairametrics Business Half Hour, where she explained that there are a significant number of Nigerians who only have access to one financial product and not the entire suite.
“Some persons only have a bank account for deposits and withdrawals. But they have never had access to loans and overdrafts, or even investment products where they can earn returns off their money. That is partial financial inclusion and our goal at Branch is to ensure that everyone has complete financial access,” Ademola explained.
Branch international started in Kenya in 2015, before entering Nigeria as a lending app in 2017. In the last three years, the fintech has expanded its services into other areas to make it a full digital bank. “We started out with a money lenders license from the Lagos state government but now, we are fully licensed and regulated by the Central Bank of Nigeria,” Ademola explained.
Now, Branch is not just offering loan products, it also offers commission-free financial transactions and investment packages for customers to earn some returns on their money. There is also a referral scheme where customers refer a friend and earn some bonus. The company has presence in Nigeria, Kenya, Tanzania and India, and is backed by well-known investors across the globe.
What is the model?
As a digital bank, Branch operates a leaner single-branch model which frees up a lot of funds that could have gone into operations. With this, the fintech can pass on some of these savings to the customers in form of commission-free transactions.
“Once you download the app, you can set it up in less than five minutes, make deposits and start transacting. All transactions are commission-free. You do the KYC as well, and enter other information if you want to request a loan. Your loan can get approved in 24 hours, and you will have access to the funds. For customers that want to invest, they get 20% deposit per annum on their investment deposits. There is no lockdown period so you have immediate and constant access to your money,” she explained.
To ensure that customers’ deposits are secured, Branch selects and only invests in securities that are principal assured.
Data protection and customer experience
As a fintech that is fully licensed and regulated by the CBN, Branch takes measures to protect customer data. First off, the data entered for loan approvals are handled by algorithms, not humans. Its data protection policy is NDPR compliant on the national level, and GDPR compliant on a global level.
Branch also adds to their model a unique customer experience. After disbursing over 3 million individual loans and about 35,000 reviews, the customer service seems to be one feature that constantly gets good reviews.
“Banks like ours are called neo banks or challenger banks. We are building a banking model that says banking doesn’t have to be as it has been traditionally in terms of ease and comfort and cheapness. And that is why the tagline “Better than your bank” comes in,” Ademola stated.
During the pandemic, Branch had to cut down on loans as a way to manage default rates, but after the pandemic, the loan approval figures have rebounded showing an almost complete recovery from the pandemic.