Sunday, August 7, 2022
Sunday, August 7, 2022
Home Startups Digital Banking Platform Umba acquires majority stake in Kenya’s Daraja microfinance bank

Digital Banking Platform Umba acquires majority stake in Kenya’s Daraja microfinance bank

by Milcah Lukhanyu
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Umba, a U.S.-based digital bank that focuses on emerging markets, has acquired a majority share of Daraja, a Kenyan deposit-taking microfinance bank, for an undisclosed amount.

The move comes after Umba raised $15 million in a pre-series A round in April this year, when it also announced  plans to expand beyond Nigeria to Kenya, Ghana and Egypt.

“The investment by UMBA will strengthen Daraja MFB’s business model. In particular, it will support the digitization of Daraja MFB as it moves to providing ‘anytime anywhere’ services to its customers. This is aligned to CBK’s vision of a microfinance banking sector that works for and with Kenya,” the CBK said in a statement.

According to the Central Bank of Kenya (CBK),  Umba had taken up 66.6% shareholding, an acquisition that is expected to fast-track Daraja’s digitization.

 Daraja was licensed in 2015 by the CBK and its main customers are small and medium enterprises.It has a market share of below 1% of the microfinance banking sector in Kenya.The microfinance firm is expected to give Umba a stronger presence in the country’s competitive financial sector, and an opportunity to offer more targeted services, while also giving the micro-finance a lifeline  in an industry that has been strongly disrupted by digital lenders.

The fintech company, Umba was founded by Tiernan Kennedy and Barry O’Mahony.It offers a wide range of financial products, including free accounts, interbank transfers, peer-to-peer transfers, bill payments and loans at a monthly interest rate of 10%.

  So far,the fintech has raised $17.5 million from investors like Tom Blomfield, the co-founder of Monzo, Lachy Groom and ACT Ventures, Lux Capital, Palm Drive Capital, Banana Capital, Streamlined Ventures and Costanoa Ventures

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