Visa Expands SMB Service In Kenya With Alt-Lender

Visa is expanding its presence with small businesses in Kenya through a new partnership with alternative lender Branch International, a mobile small business lender.

Reports in the Kenyan Wall Street on Monday (Aug. 6) said Visa is working with Branch to link Visa-friendly SMBs with financing. Branch disburses funds directly to businesses’ phones, reports explained.

Visa’s general manager for East Africa, Sunny Walia, said the collaboration will “offer seamless access to finance throughout Visa networks as [Branch] seeks to provide micro-credit facilities to merchants across Kenya.”

According to reports, small merchants can access loans of up to $300 with six-month repayment terms, though Visa and Branch did not disclose interest rates.

Last year, Visa introduced new peer-to-peer (P2P) payment functionality in Kenya — the country known for high adoption rates of mobile payments and other financial services — enabling consumers to make P2P payments without transaction fees. The service launched after Visa introduced mVisa, a QR code digital payment service.

Visa’s tie-up with an alternative SMB lender in Kenya comes as local regulators explore the mobile lending space. High adoption of mobile FinTech has broadened financial inclusion for the country, but lenders using mobile platforms to reach borrowers are also charging high interest rates, which has caught the attention of Kenya’s National Treasury, according to Reuters reports from last May.

“We have a lot of predatory lending out here, which we want to regulate,” said the Treasury’s director general of budget, fiscal and economic affairs, Geoffrey Mwau, in an interview with Reuters.

Kenya’s finance ministry has reportedly drafted rules that include online lenders, an initiative that FinTechs in the country will be watching closely, reports said.

Earlier research covered by the Wall Street Journal found that mobile money is now a part of most Kenyans’ lives. There are an estimated 110,000 “agents” in the country that operate small storefronts at which users can deposit and withdraw cash linked to mobile accounts.