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CBK Confirms Daraja Microfinance Bank, A Kenyan Bank, Sold To A US Firm

SK 3 years ago 2 min read

The purchase of 66.06 percent of Daraja Microfinance Bank Limited (Daraja MFB) by UMBA Inc. (UMBA) with effect from July 1, 2022, has been announced by the Central Bank of Kenya (CBK).

This followed the Treasury Cabinet Secretary Ukur Yatani’s permission on June 10, 2022, and CBK’s approval on May 23, 2022, all in accordance with Section 19(4) of the Microfinance Act.

A fintech business called UMBA was founded in the American state of Delaware and is based in San Francisco, California.

Nigeria and Kenya are where the company has activities. UMBA Technology Limited, a subsidiary, runs a non-deposit-taking credit business in Kenya.

It operates in Nigeria in collaboration with a registered bank to provide digital banking services.

In 2020, the business raised $2 million (Sh238 million) to increase the scope of its offerings.

The UMBA raised $15 million (Sh1.7 billion) in 2021 to expand into other African markets and maintain its tremendous growth in Nigeria.

On January 12, 2015, the CBK granted Daraja MFB a license to operate a community microfinance bank in Dagoretti, Nairobi County.

Both the main office and a branch of the microfinance bank are situated in Nairobi’s Dagoretti Corner.

Micro and small businesses are the bank’s primary target customers. As of March 31, 2022, it was classified as a small microfinance bank with a market share of less than 1% in the microfinance banking industry.

The Central Bank remarked that Daraja MFB’s business model will be strengthened by the UMBA investment.

“In particular, it will boost Daraja MFB’s digitalization as it works to offer its consumers ‘anytime, anywhere’ services. This is consistent with CBK’s goal of creating a microfinance banking industry that serves and collaborates with Kenyans

“CBK welcomes this transaction which is a critical component of Daraja MFB’s transformation plan. It will strengthen Daraja MFB and support the stability of Kenya’s microfinance banking sector,” a statement from CBK read.