Umba Raises $5M to Scale Vehicle and SME Lending in Kenya
Umba is a digital bank offering free bank accounts, low-cost payments, bill pay, loans, and cashback through a mobile app.
Digital banking is shifting gears in Kenya—and Umba is in the driver’s seat.
The Nairobi-headquartered neobank just announced a $5 million debt facility from U.S.-based Star Strong Capital to accelerate its secured lending operations. With a growing focus on vehicle financing and SME loans, Umba is betting big on asset-backed products as the future of fintech in East Africa.
“This is revenue-generating capital, rather than runway-extending capital,” said Umba CEO Tiernan Kennedy in an interview with TechCabal, underscoring the startup’s shift from high-growth burn to sustainable scale. The facility brings Umba’s total funding to $20 million, following its $15 million Series A in 2022 led by Nubank executives.
From Digital Loans to Durable Lending
Founded in 2018, Umba launched in Kenya in January 2023 after acquiring a majority stake in Daraja Microfinance—a move that gave it a Central Bank of Kenya license. While much of the early fintech wave was built on short-term, high-interest unsecured loans, Umba is leaning in a different direction: long-term, asset-backed lending with real-world impact.
With over 5 million registered vehicles in Kenya, up from 3.9 million in 2021, demand for auto loans has surged. “The vehicle financing market is valued at around $17 billion,” Kennedy noted. “It is now the largest part of our loan book in Kenya.”
SMEs are also in Umba’s sights. The company says it will use the new capital to expand products already showing strong revenue performance, especially in underserved business segments that struggle with access to traditional credit.
Digital Banking, the Umba Way
Unlike legacy banks weighed down by paperwork and processing delays, Umba offers a fully digital experience—streamlining onboarding, real-time verification, and disbursement for both individuals and small businesses. The company says its revenue grew sixfold in 2024 and expects to report a profit in Kenya this year.
While fellow fintechs like Moniepoint in Nigeria eye full commercial banking licenses, Umba isn’t looking to become a traditional bank. Instead, it plans to stick with its current microfinance license, which it believes is enough to scale its secured lending suite for now.
What’s Next?
With its senior leadership now in place across Kenya and Nigeria—and vehicle lending gaining ground as its flagship product—Umba is entering a new phase of growth. The company says it has no immediate plans to expand beyond Kenya, despite earlier ambitions to launch in Egypt and Ghana.
Still, in a market where most neobanks are just getting started with secured credit, Umba’s strategic focus and operational maturity could give it a strong head start.
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