In December 2015, Matt Flannery discovered that thousands of people in his new lending business were fake. Branch, the company he had started that year, had been fooled by roughly 5,000 fraudulent accounts in Kenya. The loss reached about $50,000. For a lender trying to read character through a smartphone, this was an awkward introduction to human ingenuity.
- Branch turns phone data and repayment history into loan offers.
- It has expanded from credit into market-specific banking products.
- Its difficult work is managing fraud, funding and the price of access.
The episode is a useful place to begin because it punctures the tidy version of financial technology. Put an application on a phone. Feed data into a model. Approve a loan. Somewhere in that sequence, actual people start behaving in ways the model has never encountered. Branch’s history is partly a record of discovering what the screen leaves out.
A financial life without a credit file
Before Branch, Flannery co-founded Kiva and spent nearly a decade leading the microfinance nonprofit. Branch pursued financial access through a commercial business. He started it with Daniel Jung and Random Bares in 2015, beginning in Kenya, where mobile money already provided a way to move funds without sending customers into a bank.
The opening was straightforward. A person might lack a conventional borrowing record while still conducting a busy financial life. Branch could examine permitted smartphone information, including handset details and financial transaction messages, then combine those signals with repayment behavior. That creates another way to assess someone whose formal credit file says very little.
For customers, the attraction is practical: apply on an Android phone, receive an offer, and get funds in a mobile-money or bank account. Personal expenses and small-business cash needs both fit that format. Approval remains a lending decision. Owning a smartphone does not entitle anyone to money.
The borrower who was actually an account farm
The early fraud revealed the danger of confusing an account with a person. Forbes reported in 2017 that Branch adopted similarity detection to connect accounts to a device’s identifying characteristics and spot repeated identities. The lesson travels well: improving a credit score does little good when the supposed borrower is an invention.
“I woke up and I learned that thousands of people in my bank were fake.”Matt Flannery, recalling the 2015 fraud
Branch’s expertise sits at that intersection: credit analysis, identity checks, software and the feedback generated by repayments. Its competitors include Tala and bank-linked mobile credit in Kenya. The shared opportunity is serving borrowers conventional lending overlooks. Branch’s particular bet combines that underwriting loop with an increasingly broad set of financial products.
Each repayment adds evidence for the next assessment. Larger offers remain conditional.
The app is cheap to copy. The money is harder.
A lender needs funds to lend, even when its distribution costs less than a branch network. Branch announced a $70 million package of debt and equity in 2018. In 2019 it announced another $170 million financing package and a Visa partnership. The distinction matters: borrowed capital and investors buying shares perform different jobs.
Interest and applicable charges support the lending business. Branch bears the work of assessing risk, financing balances and collecting repayments. Visa’s announced role included plans for virtual prepaid card access. An elegant interface can simplify the customer’s task; behind it, the company still needs payment infrastructure and money that costs money.
The customer’s bill deserves equal attention. Branch’s Kenyan FAQ currently lists equivalent APRs from 22% to 229%, depending on the offer, and a possible 6% late charge on outstanding repayment amounts for some loans. Those figures describe one market’s published terms, not every Branch loan. Fast access can carry a substantial price.
Offer-dependent. Compare the total repayment and due dates, not just the speed of approval.
When the tap stopped running
In 2020, a different problem arrived. A phone-based application still worked during lockdowns, but customers’ earning power could deteriorate. In a BusinessDay interview, Nigeria managing director Dayo Ademola explained that Branch restricted new lending through much of the middle and later part of the year. The company chose caution while borrowers’ circumstances recovered.
That decision exposes a limit of the model. Better distribution cannot repair a customer’s lost income. Another founder can copy the discipline: keep the ability to slow originations, and treat a changed economy as new evidence. Lending that works in ordinary trading conditions may become unsuitable when repayment capacity abruptly disappears.
A bank enters the branchless story
Branch also wanted a relationship that lasted between loans. In Nigeria, its 2021 expansion added transfers and investments to the proposition. Its global website now advertises bill payments and a Nigerian debit card. In Kenya, savings choices include flexible, fixed and target accounts, with different withdrawal rules. Products and terms vary by country.
Then came a wonderfully concrete development for a digital lender: buying a bank. Kenya’s central bank confirmed Branch’s acquisition of 84.89% of Century Microfinance Bank, effective January 1, 2022. Century was a small institution with two branches. The deal connected Branch’s technology business to a regulated banking institution.
The center of gravity moves
Today’s scale requires careful reading. Branch reports over 100 million downloads on its homepage. Separately, its About page reports more than 20 million customers and 75 million loans. Downloads measure distribution; customers measure people served; repeat loans measure something else again. None is a count of currently active borrowers.
The geography has changed too. An August 2026 Crisil rating report says India contributes more than 90% of parent revenue. Meanwhile, Branch confirmed layoffs in Kenya and Nigeria in May, despite reporting approximately $30 million in global profit for 2025. Financial access can be the mission while costs remain a management priority.
Branch’s useful idea is that an overlooked borrower may already have a readable record. Its harder-earned lesson is that reading the record is only the beginning. Someone must verify the person, fund the loan, price the risk and live with the result.