Umba, a digital banking platform with a focus on credit services, has recently secured a $5 million debt facility from Star Strong Capital. This financial boost is aimed at expanding its loan offerings in Kenya. Co-founded by Tiernan Kennedy and Barry O’Mahony, the fintech company made its official foray into the Kenyan market in 2022 through the strategic acquisition of Daraja Microfinance Bank.
Initially, at its inception, Umba had expressed a desire to extend its services to Kenya, but it wasn’t until the acquisition that these plans materialized.
Since commencing operations in April 2023, has reported considerable growth for the startup, with projections pointing towards a 300% growth trajectory in 2024.
Upon entering the Kenyan financial landscape, Umba adopted a credit-led strategy, mirroring the business models of similar fintech entities like Carbon and FairMoney. However, Umba’s approach has since expanded, evolving into a comprehensive digital banking service. Today, Umba offers an array of financial products, including loans, fixed deposits, savings accounts, and business savings accounts, positioning itself as a formidable competitor to conventional banking institutions.
The trend of Nigerian startups venturing into the Kenyan market is becoming increasingly prominent, particularly within the fintech sector. Recent developments include Rise’s acquisition of Hisa and the anticipated acquisition of Kopo Kopo by Moniepoint.
Although Kenya’s market is smaller than Nigeria’s, it presents a strategic entry point into the East African region and boasts a sophisticated digital financial infrastructure, which simplifies the integration of digital financial services.
Kennedy notes the strategic advantages of the Kenyan market, stating;
There’s a very mature ecosystem here, and as businesses look for a second market, I think it’s a really good choice. It is the largest economy in East Africa, but it opens up Tanzania, Uganda, and Rwanda, which are really exciting startup ecosystems.
While Umba had initially eyed expansion into other African nations, the company is currently prioritizing the consolidation of its presence in both Nigeria and Kenya, putting broader expansion plans on hold to focus on strengthening its operations within these two key markets.