Umba Raises $5M to Boost Car and SME Loans in Kenya

April 9, 2025

2 min read

Umba, a digital bank based in Nairobi, has raised $5 million to grow its secured lending business in Kenya. The bank will use this money to offer more loans for car purchases and small business support. This marks a shift by Kenyan neobanks toward long-term, secured lending and away from short-term, high-interest digital loans.

The funding came as a debt facility from Star Strong Capital, a U.S. asset management firm. The deal, which adds to Umba’s total funding of $20 million, was advised by Gahigiro Capital. Since this is a debt deal, Umba didn’t give away company shares, meaning it remains fully in control of its business.

Umba Raises $5M to Boost Car and SME Loans in Kenya Umba CEO Tiernan Kennedy. Image Source: Umba.

Umba’s CEO, Tiernan Kennedy, said the new capital will grow parts of the business that already make money. “This is revenue-generating capital, not just money to stay in business longer,” he explained.

Vehicle Financing Leads Umba’s Growth in Kenya

Umba launched in Kenya in January 2023 after buying 66.6% of Daraja Microfinance in 2022. This deal gave Umba a banking license from the Central Bank of Kenya. Although Daraja holds less than 1% of the microfinance market, it focuses on small and medium-sized businesses (SMEs)—the same target group for Umba’s loans.

In 2022, Umba raised $15 million in Series A funding led by Nubank executives. The money was meant to help the company grow in Kenya, Egypt, and Ghana. So far, Umba has only launched in Kenya.

According to Kennedy, vehicle financing is now Umba’s biggest loan service in Kenya. He said the market for car loans is worth around $17 billion, with over 5 million registered vehicles in the country—a jump from 3.9 million in 2021.

Umba makes borrowing easier by offering fast, paperless loans. Customers can sign up online, get verified in real time, and receive loans much faster than they would through traditional banks.

Although Umba hasn’t shared exact revenue numbers, it claims its income grew six times in 2024 and that it expects to make a profit in Kenya this year.

While many fintechs in Africa still focus on unsecured digital loans, Umba is now betting on asset-backed lending, such as car loans. Other companies in this space include Autochek, which also offers loans to car owners in Kenya.