The Central Bank of Kenya (CBK) has announced the acquisition of 66.06 per cent shareholding of Daraja Microfinance Bank (Daraja MFB) by US-based fintech company UMBA.
The announcement follows CBK’s earlier approval, under Section 19(4) of the Microfinance Act and approval by the Cabinet Secretary for the National Treasury and Planning, pursuant to Section 19(3)(b) of the Microfinance Act.
UMBA fintech is incorporated in the State of Delaware, United States of America and has its headquarters in San Francisco, California. The company has operations in Kenya and Nigeria.
In Kenya, UMBA operates a non-deposit-taking credit business through its subsidiary UMBA Technology. In Nigeria, it operates in partnership with a licensed bank to offer digital banking services.
Daraja MFB was granted a license by the Central Bank of Kenya on January 12, 2015, to carry out community microfinance bank business within Dagoretti Division of Nairobi County.
The MFB’s Head Office and branch are located at Dagoretti Corner, Nairobi. The MFB’s target market is Micro and Small Enterprises. It is categorised as a small microfinance bank with a market share of below 1 percent of the microfinance banking sector as of March 31, 2022.
Analysts say the investment by UMBA will strengthen Daraja MFB’s business model. In particular, it will support the digitalization of Daraja MFB as it moves to provide ‘anytime anywhere’ services to its customers.
This is aligned with CBK’s vision of a microfinance banking sector that works for and 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.
