Umba, a fintech company that originated in Nigeria, has expanded its services to Kenya by purchasing a controlling stake in Daraja Microfinance Bank. This acquisition has granted Umba authorisation to offer complete banking solutions in Kenya, including opening and operating current, savings, and fixed deposit accounts, as well as providing lending and payments services.
Umba’s executives describe the acquisition as a significant milestone and the result of a lengthy process. The company’s founders, Tiernan Kennedy and Barry O’Mahony, see Kenya as a country with enormous market potential due to its rapidly growing youthful population. They also believe that Kenya’s fintech market has been significantly neglected by both physical banks and fintech firms due to the rigorous licensing regulations in place.
Umba’s distinct advantage is that it can offer services to customers without the financial burden of a traditional branch network. Additionally, it designs its software, avoiding the requirement to pay substantial licensing fees to financial institutions, and offers account registration and customer assistance within its own application.
The company raised $18 million in funding to date from investors such as Costanoa Ventures, Lachy Groom, Lux Capital, and Palm Drive Capital, as well as angel investors. In April 2022, the startup announced a $15 million Series A round and its intention to expand to Egypt and Ghana, in addition to Kenya. Umba’s expansion into the Kenyan market has attracted local investors, including Chandaria Capital. Umba’s executives see the Kenyan market as full of opportunity and are excited to bring fresh, innovative new ways for businesses and consumers to bank to the Kenyan market.
As Umba expands its services to Kenya, the company aims to capitalise on its unique entry point into the Kenyan market, as well as its strong business in Nigeria. The company has identified an opportunity to provide accessible digital financial services to Kenyan customers without the limitations imposed by traditional banking infrastructure. By avoiding the need for a physical branch network, Umba can provide financial services to a wider range of customers, including those who live in remote areas. Moreover, the company’s innovative technology and customer service model provide an efficient, transparent, and secure platform for customers to manage their finances.
Umba’s expansion into Kenya is also part of its broader mission to promote financial inclusion in Africa. The company aims to provide affordable and accessible financial services to underserved populations, particularly those who lack access to traditional banking services. Through its innovative digital platform, Umba hopes to increase financial literacy and enable more people to participate in the formal financial system.
In addition to its financial services, Umba is committed to social responsibility and community development. The company has established partnerships with local organisations to provide education and training programs to disadvantaged youth in the areas where it operates. Through these initiatives, Umba aims to promote economic growth and improve the well-being of local communities.
Umba’s entry into the Kenyan market represents an exciting development for the country’s fintech industry. With its innovative technology, customer-centric approach, and commitment to social responsibility, Umba is well-positioned to compete and succeed in Kenya’s rapidly evolving financial landscape. The company’s expansion is also likely to spur further innovation and growth in the Kenyan fintech sector, which bodes well for the country’s economic development and financial inclusion goals.
