Young millennials may have problems getting access to loans given their lack of credit history, and recent events have affected opportunities more. Branch is a new personal finance app that uses Machine Learning to customise and provide loans up to Rs 50K to the mobile generation.
It is the only platform that provides credit to borrowers without collateral or credit score of a user and deposits money directly into their account within two hours. Having disbursed over $500 million across the countries it operates in including India, we speak to Delhi-based Sucheta Mahapatra, MD- Branch, India about the applications of the app.
How does Branch decide who is eligible for the micro-loans? How many turn out to be ineligible?
At Branch, we are opening up access to credit to previously underserved segments - in the form of quick and smaller ticket size loans (not usually offered by traditional banks and lenders). Since we use technology to underwrite a borrower (and use alternative data sources) - we are able to reach deeper into the customer base and serve even those who don’t have bureau history. This along with our Digital approach (smartphone led, low cost and data driven) - lets us serve customers whom traditional Banks typically don’t serve. For consumers, Branch is the easiest way to get loans. Users can choose flexible loan amounts and payment term with a transparent fee structure - and get the loan into their account almost instantly.
What impact did Covid-19 have on the micro-lending industry, and on Branch in particular?
The second wave and the widespread impact it is causing is indeed a tragedy. As an earlystage Fintech, we are meeting critical financial services need especially for the under banked in these challenging times. These needs for our customers will only get amplified due to the pandemic. Our customers and our teams remain our top priori t ies in these times.
What is the typical customer profile of Branch users?
Do you have any repeat borrowers? We have a large proportion of repeat borrowers. These customers come back and reapply with us and graduate to higher loan amounts. This loyal customer base is a key driver of our success.
Given the volatile nature of the economy at the moment, what plans does Branch have for the future?
While there is flux, we have also seen this period as one of resilience in our economy. We are seeing originations and disbursals growing steadily - all the while maintaining and improving the economics of our portfolio. We will continue to offer credit related products to our customers. Additionally, our aspiration in every geography that we operate in, is to become a full-service digital bank.