News and Analysis
April 11, 2025
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Umba has secured USD 5 million (Ksh650 million) funding to expand its operations in Kenya.
The digital bank, which has operations in Kenya and Nigeria, specializes in lending to Small and Medium-sized Enterprises (SME) while also offering flexible financial products, such as vehicle financing and logbook loans.
The financing deal was exclusively provided by US-based investment firm Star Strong Capital. Gahigiro Capital served as the transaction advisor for the deal.
Tiernan Kennedy, CEO of Umba, highlighted the significance of this capital infusion, stating that new funds would support the growth of its already successful products.
In particular, he pointed out the promise of the vehicle financing product, which is in high demand in the country, occasioned by the growth of the automobile sector.
Currently, there are over 5 million registered vehicles in the country and more Kenyans are looking for affordable auto loans as a path to ownership. According to Kennedy, vehicle financing has become one of its major long-term products.
“The vehicle financing market is valued at around $17 billion (Ksh2.2 trillion). It is now the largest part of our loan book in Kenya,” he added.
About Umba and Its Products
Umba was founded in 2018 and started operations in Kenya in 2022 following the acquisition of a 66.6% stake in Daraja Microfinance. The deal secured Umba a microfinance banking licence from the Central Bank of Kenya.
Unlike traditional banks, Umba’s fully digital onboarding, real-time verification, and speedy disbursement processes offer a streamlined alternative for consumers and SMEs alike.
“While many fintechs focus on high-interest, short-term unsecured loans, we’re building long-term customer relationships through asset-backed products,” Kennedy stated.
Apart from vehicle financing and business loans, the digital bank also offers savings plans for their customers, who can earn interest of up to 18% per annum with a minimum of Ksh5,000 on the fixed deposit account.
Umba also offers automated payroll services for businesses. The platform also allows businesses to make payments to suppliers and vendors while managing their petty cash at the same time.
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