Umba, a digital bank with a credit-first approach, has secured a $5 million debt facility from U.S.-based Star Strong Capital to expand its loan portfolio in Kenya. The funding comes at a time when the fintech is witnessing exponential growth—reporting a sixfold revenue increase in the past year, largely fueled by rising demand for vehicle financing and loans for small and medium-sized enterprises (SMEs).
Founded by Tiernan Kennedy and Barry O’Mahony, Umba entered the Kenyan market in 2022 through the acquisition of Daraja Microfinance Bank. O’Mahony exited the venture in 2023, and since its official public launch in April 2023, the startup has significantly expanded its product suite under the leadership of CEO Kennedy.
Backed by the latest round of funding, Kennedy believes Umba is well-positioned to grow its presence and meet increasing market demand.
“Our Kenyan launch has exceeded expectations, with excellent lending performance. As the only pure-play digital bank in the market, we’re delivering a better way to bank for Kenyans through speed, accessibility, and tailored financial solutions,” Kennedy noted.
Originally modeled on Nigeria’s credit-led fintech players like Carbon and FairMoney, Umba has since evolved into a full-service digital bank. It now offers a comprehensive range of services including personal loans, fixed deposits, savings, and business savings accounts, positioning itself as a digital-first alternative to traditional banks.
Kenya’s financial ecosystem presents a unique landscape, with M-PESA processing nearly 60% of the country’s GDP and a Central Bank-imposed moratorium on new banking licenses. However, Umba’s ownership of a microfinance bank license via Daraja provides it with a critical edge, enabling it to legally offer banking services in a tightly regulated market.
Umba’s operational model also includes a network of over 5,000 agents across Kenya. These agents not only onboard new customers but also use Umba’s financial products themselves—creating a self-reinforcing growth loop that accelerates customer acquisition.
Unlike many fintechs that struggle with high loan defaults due to the absence of credit enforcement mechanisms, Umba has focused on productive lending. A majority of its loans are allocated to vehicle purchases and SME growth, with financed vehicles co-owned by the company—allowing Umba to reclaim assets in case of defaults.
Kennedy emphasized that demand for Umba’s loan products currently exceeds its lending capacity, making the newly secured debt facility essential for continued growth.
Spring Hollis, Founder and CEO of Star Strong Capital, expressed confidence in Umba’s potential:
“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.”
Though Umba had previously explored expansion into other African markets, it has decided to pause those plans to concentrate on deepening its footprint in Kenya and Nigeria—two of the continent’s most dynamic fintech ecosystems.
