The quality of life in the India in the 21st century is not great to say the least. A few decades ago, people could buy multiple homes on a simple office-goer’s salary.
But now, millennials know how hard it can be to even rent a decent apartment in a metro.
Branch International is hoping to help you take the edge of this problem. A startup based in San Francisco, they’ve positioned themselves as a mobile-based lender, with existing operations in Africa and Latin America. And this month, they’re launching to India.
To break it down, they offer personal micro-loans from Rs 500 all the way up to Rs 50,000 with terms between 4 – 52 weeks. The interest can be anywhere between 9 percent to 24 percent.
All the processing takes place through their app, available here on Google Play. They’re also one of the first recipients of the Reserve Bank of India’s (RBI’s) mobile-only Non-Banking Financial Company (NBFC) license. Basically, they’re not a bank, but they can still give you that loan.
All you need to do is download the app and register with your phone number or Facebook account. Once your profile is verified (which the app promises takes place in 24 hours), users can apply for loans and receive money in their bank accounts within minutes.
Branch relies solely on the data from a user’s mobile device, using machine learning algorithms to analyze thousands of data points to determine the creditworthiness of a user and offer a loan in minutes.
Any repayments are also done through the app, using your bank account, debit card, or UPI. Paying late doesn’t incur late fees, but paying on time does improve your credit, and therefore ability to take larger loans in future.
“Our proprietary machine learning credit models look at nearly 3000 features in order to assign a Branch credit score to each customer, says Charishma Chotalia, General Manager of Branch India. “After downloading the Branch App, customers provide explicit permission to allow our models to access this data. These features can include phone type, various app packages, number of contacts, and more. The model allows us to understand the appropriate loan offer for each customer, but in our more mature markets more than 80% of customers who apply for a loan are approved.”
“While our cutting edge machine learning does do the heavy lifting for determining a customer’s creditworthiness, we also use additional data sources — such as government databases where available.” Chotalia says they also have an internal team that does manual loan servicing and application review, which allows their algorithm to improve over time from their learnings
Another important point she’s quick to stress is that all your data submitted for the review is a security priority. The data is encrypted and protected, Chotalia says, and is never shared with third parties. They also keep a close eye on account activities to ensure none have been hijacked by thieves of hackers.
“With the rise in smartphone penetration, the tech-savviness of Indian customers, and the government’s push toward a digital India, we believe that there is huge opportunity for our product to succeed in this market,” Chotalia adds.