Irish founded fintech Umba has secured a $5 million debt facility that will help it expand its customer base and increase lending capacity.
The digital bank, which is focused on Africa, raised the debt facility from Star Strong Capital, and is viewing it as a key step in becoming profitable in the coming months.
Chief executive Tiernan Kennedy said securing the debt facility was “very significant”, with the company previously self-funding its growth.
Umba started operations in Nigeria in 2021, and launched its services in the Kenyan market following its acquisition of a majority shareholding in Daraja Microfinance Bank that allowed it to offer full banking services in Kenya. That included current accounts, interest-bearing savings accounts, fixed deposit accounts, lending and payments.
The company is operating in a growing market, with Kenya attracting $800 million in venture capital funding in 2023, and the fintech market currently valued at $7 billion. It is projected to grow at a compound annual growth rate of 16.5 per cent between 2023 and 2027. It is one of 14 licensed Microfinance Banks in Kenya
Revenue growth at the company hit 19 per cent month-over-month in 2024, with Umba growing revenue sixfold last year. The Kenyan operation is expected to report a profit this year.
The digital bank, which was founded by Mr Kennedy and former Munster rugby player Barry O’Mahony, offers a transparent and accessible digital financial service alternative to legacy African banks. Mr O’Mahony stepped back from the running of the business in 2023.
The company has also made a number of key appointments to its Kenyan management team to strengthen the business.
“Our partnership with Umba represents more than just a financial transaction; it is an investment in the future of digital banking and financial inclusion in Africa,” said Spring Hollis, chief executive of Star Strong Capital.
“We believe Umba’s innovative approach and customer-centric model position them to become a key player in Kenya’s fintech revolution
“This debt financing will support their continued growth and ensure they remain at the forefront of delivering accessible, affordable financial solutions to underserved markets.”
