Umba, a U.S.-based digital banking platform focused on emerging markets, has acquired a majority stake in Daraja, a deposit-taking microfinance bank in Kenya. The deal, which grants Umba a 66.6% shareholding, aims to accelerate the digital transformation of Daraja’s operations. The financial terms of the acquisition remain undisclosed.
This development aligns with Umba’s recent announcement of plans to expand its operations beyond Nigeria into Kenya, Ghana, and Egypt. In April, the fintech raised $15 million in a pre-series A funding round, bringing its total funding to $17.5 million. Backed by investors like Tom Blomfield (Monzo co-founder), Lachy Groom, and ACT Ventures, Umba is positioning itself as a key player in emerging markets.
Founded by Tiernan Kennedy and Barry O’Mahony, Umba provides a suite of financial services, including free accounts, interbank transfers, peer-to-peer transfers, bill payments, and loans with a 10% monthly interest rate.
Kenya’s Central Bank acknowledged the strategic potential of this acquisition in a statement: “The investment by Umba will strengthen Daraja MFB’s business model, particularly by supporting its digitization to offer ‘anytime, anywhere’ services to its customers. This aligns with the vision of a microfinance banking sector that serves the needs of Kenya’s people effectively.”
Daraja, licensed in 2015, primarily serves small and medium-sized enterprises (SMEs) but holds less than 1% of Kenya’s microfinance banking market share. By partnering with Daraja, Umba aims to bolster its presence in Kenya’s competitive financial sector while enabling the microfinance institution to navigate an industry increasingly influenced by digital lenders.This acquisition follows a similar move by Branch International, another U.S.-based fintech operating in Africa, which recently acquired a majority stake in Century Microfinance Bank. Such deals provide fintech companies access to existing customer bases while granting them the ability to offer regulated banking services, bypassing operational restrictions typically imposed on digital-only platforms.Umba has ambitious plans to further diversify its offerings. In a previous statement, the company revealed intentions to introduce debit cards, support savings accounts, and enable stock trading in the near future. This expansion strategy underscores its commitment to reshaping financial services across Africa.
