Andreessen-Backed Upstart Aims to Build Pan-African Digital Bank

(Bloomberg) -- San Francisco-based Branch International plans to become a pan-African digital bank as it sees a growth opportunity in online financial services on the continent.

The company, with operations in India, Kenya, Nigeria, and Ghana, will build its new business by acquiring microfinance lenders, founder and Chief Executive Officer Matt Flannery said in an interview. New deals, including potentially in Tanzania, will cement Branch's position as the first fintech to buy banks in Sub-Sahara Africa, he said.

“The establishment of a true pan-African digital bank is long overdue,” Flannery said in the Kenyan capital, Nairobi. “There's a real need for a sort of borderless bank” that's able to take deposits and offer small loans, he said.

Africa is a fertile ground for the new model, given that most people on the continent use mobile-phone digital wallets more often than mainstream bank accounts for financial transactions, according to Flannery.

Backed by investors including Andreessen Horowitz, CreditEase Fintech Investment Fund and the International Finance Corporation, Branch has disbursed more than $600 million in loans to over 4 million people since 2015. Rather than relying on credit reference bureaus, the fintech uses machine learning to determine borrowers' credit-worthiness, he said.

“We've been offering a range of financial products under different licenses throughout sub-Saharan Africa,” Flannery said. “We'll continue to expand that approach over the next years, in particular in places like Tanzania, Uganda, Nigeria and Ghana.”