Digital bank Umba has raised a $5 million debt facility to expand its secured lending operations in Kenya, with a focus on vehicle financing and SME credit. The Nairobi-headquartered fintech, which also operates in Nigeria, says the new funding will support its shift toward sustainable, asset-backed lending.
The round comes from U.S.-based Star Strong Capital, with Gahigiro Capital acting as the transaction advisor. Structured as debt, not equity, the deal allows Umba to raise non-dilutive capital while continuing to scale. This brings its total funding to $20 million.
“This is revenue-generating capital, rather than runway-extending capital,” said Umba CEO Tiernan Kennedy.
Founded in 2018, Umba entered the Kenyan market in early 2023 after acquiring a majority stake (66.6%) in Daraja Microfinance. The acquisition gave Umba access to a microfinance banking licence from the Central Bank of Kenya. Daraja, which targets SME clients, currently holds less than 1% of Kenya’s microfinance market share.
The new facility will help Umba grow its revenue-generating verticals, particularly in vehicle financing, a product that’s quickly become core to its Kenyan offering. Kennedy noted that Kenya’s vehicle financing market is now valued at approximately $17 billion and that the company’s loan book reflects this growing demand.
“It is now the largest part of our loan book in Kenya,” he said.
Unlike traditional banks, which rely on physical paperwork and manual approvals, Umba offers digital onboarding, instant verification, and faster loan disbursement. Though it hasn’t released current figures, the company says its revenue in Kenya grew sixfold in 2024, and it expects to report a profit this year.
A Different Direction
While many African fintechs still focus on unsecured, high-interest loans, Umba is leaning in a different direction. It’s betting on asset-backed lending as the next chapter for digital finance in Kenya. In the vehicle finance segment, it competes with platforms like Autochek, which also offers logbook-based loans to car owners.
“We’re building long-term customer relationships through asset-backed products, not just short-term margins.” said Kennedy.
Leadership changes are also underway. Umba has completed senior hiring in both Kenya and Nigeria, though the name of its incoming Kenya CEO hasn’t been disclosed yet. Co-founder Barry O’Mahony exited the company in 2023.
Despite other fintechs like Moniepoint pursuing full commercial banking licences, Umba has no intention of applying for one in 2025. Kennedy says the company will continue scaling within its existing microfinance structure, which he believes is sufficient for its current product mix.
“This commercial banking licence is not something we’ll be prioritising in 2025,” he said.
