This Global Entrepreneur is Branch-ing Out to Set up Pocket Banks
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His first start-up was termed revolutionary in the global digital finance world and it gave him name, fame and an appearance at the Oprah Winfrey Show! Now, with his second start-up, too, Matthew Flannery is using microfinance to promote social entrepreneurship.
While he hails from the US, Flannery keeps travelling the world to meet people from different economic backgrounds and understand their need for finances.
In an exclusive interview with Entrepreneur India, global entrepreneur Matthew Flannery talked about the success of Kiva (his first start-up) and how he’s branching out with his next start-up Branch.
Racing on the African Course
As a fresh college graduate in 2005, when Flannery visited Africa, he got very excited to start his entrepreneurial journey from there. Both of his start-ups Kiva and Branch have offices in Africa and cater to the African audiences who are in need of finances.
Ask him why he chose to follow the path of social entrepreneurship and he said, “I grew up in a Christian family and have spent quite a lot of time working for underserved areas, donating to charities, going on trips where you build houses etc. When I went on to study at Stanford University and chose Computer Science, I saw the environment in the Silicon Valley, where there are endless opportunities. I decided to use technology to take the same opportunities worldwide.”
Talking about choosing Africa as the base for his operations, he said, “I know the market really well, now that I have been running businesses here for over 10 years. Africa has a growing set of tech-savvy people, who are underserved by banks and don’t have credit cards. So it has this huge group of tech-savvy people who have limited options.”
While Kiva was a platform that helped people raise funds for their project, it allows people to lend money to entrepreneurs. Through the platform, people have raised over $1 billion with a presence in over 80 countries. “With Kiva, we were able to bring microfinance to the forefront and spread awareness about the kind of work we do. People are compelled to help micro-finance out of compassion,” he said.
With the success of Kiva, Flannery decided to do more and started the microfinance institution Branch, which he calls as a bank in your pocket. “It’s like a branchless bank, which uses cutting-edge technology like Artificial Intelligence to speed up the functions of a bank, but on your phone. So many entrepreneurs lack access to small funds and don’t find support for their small businesses. Branch raises money like a bank, from institutions, hedge-funds, commercial capital markets etc. We are targeting the urban middle-class merchants in Africa, who have access to technology, who rely on their mobile phones for day-to-day operations,” he said.
The Indian Gateway
Looking at opportunities to expand the services that Branch offers to people, Flannery is now looking at the Indian market. He’s excited about the opportunities that are available in India, but also points out the similarities to the African market. People in India, too, are growing with tech, but have limited banking options and the credit card too is restricted to the elite, he said.
“In India, we are looking at partnering with Aadhaar and many other financial entrepreneurial leaders like Paytm and Razorpay. The regulations in India are enabling fintech, the market size is huge, the spread of technology is rapid and people have a great entrepreneurial spirit. Aadhaar is a world-class way to know your customer and demonetization, too, has bumped up the possibilities for fintech,” he said.
As a part of Kiva, Flannery has come to India multiple times and has been to states like Odisha for many rural development projects. He’s even an Ashoka University fellow. “When we started, it took us a long time to figure out how things work here, we tied up with different NGOs. But there were a lot of issues, like sending cross-border payments. So, with Branch we plan to set up local branches there that facilitate entrepreneurship,” he said.
Time to Break New Grounds
A journey that started in 2005, has seen many ups and downs. But there’s still a long way to go. With the kind of success Flannery has seen, he considers himself lucky but even luckier to be able to pursue social entrepreneurship. “It’s all about the passion and values. I live and breathe my work and I’m constantly involved in every detail of the work that goes on at our offices. We have done a lot but it’s time to break new grounds and continue enabling people’s access to finances,” he said.