US-based fintech Umba buys majority stake in Kenya’s Daraja microfinance financial institution – TechCrunch

Umba, a US-based digital financial institution with a give attention to rising markets, has acquired a majority shareholding of Daraja, a Kenyan deposit-taking microfinance financial institution, for an undisclosed quantity.

Kenya’s financial authority, the Central Financial institution of Kenya (CBK), stated Umba had taken up 66.6% shareholding, an acquisition that’s anticipated to fast-track Daraja’s digitization.

This comes after Umba introduced elevating $15 million in pre-series A spherical in April this 12 months, when it additionally made public its plans to broaden past Nigeria, to Kenya, Ghana and Egypt. Umba has thus far raised $17.5 million from buyers like Tom Blomfield, the co-founder of Monzo, Lachy Groom and ACT Ventures, Lux Capital, Palm Drive Capital, Banana Capital and Streamlined Ventures participated, and Costanoa Ventures.

The fintech, which was based by Tiernan Kennedy and Barry O’Mahony, affords a variety of monetary merchandise together with free accounts, interbank transfers, peer-to-peer transfers, invoice funds and loans at a month-to-month curiosity of 10%.

“The funding by UMBA will strengthen Daraja MFB’s enterprise mannequin. Particularly, it should assist the digitization of Daraja MFB because it strikes to offering ‘anytime wherever’ providers to its prospects. That is aligned to CBK’s imaginative and prescient of a microfinance banking sector that works for and with Kenya,” the CBK stated in an announcement.

The CBK stated Daraja, licensed in 2015 and whose most important prospects are small and medium enterprises, has a market share of beneath 1% of the microfinance banking sector in Kenya.

Daraja will give Umba a stronger presence within the nation’s aggressive monetary sector, and a possibility to supply extra focused providers, whereas additionally giving the micro-finance a lifeline — in an business that has been strongly disrupted by digital lenders.

Its take care of Daraja comes months after Department Worldwide, one other silicon valley primarily based fintech with operations throughout Africa, purchased a majority stake in Century microfinance financial institution. Such acquisitions give fintechs entry to current monetary providers clientele, and allows them to provide extra banking providers, which they’d in any other case be restricted from supporting.

Umba instructed TechCrunch in an earlier interview that, along with geographical growth, it’s planning to subject debit playing cards, assist financial savings accounts, and allow inventory buying and selling within the coming months.

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