Ugandan fintech startup Numida raises 2.3 million to expand in Africa
Small businesses in Africa need digital banking services, including plenty of credit. Although these businesses drive economic growth and contribute up to one-third of the continent’s GDP, they are often financially excluded from credit and other financial services due to their size and informality.
One such company tackling this challenge in the eastern part of Africa is Ugandan financial technology (fintech) startup Numida. The firm has raised a $2.3 million seed funding round led by MFS Africa to help it expand across the continent and launch new products.
With this new financing, Numida plans to expand aggressively in Uganda and pilot in a new market, preferably in West Africa.
Launched by Mina Shahid, Catherine Denis and Ben Best in 2017, Numida began life enabling traditional MFIs to provide unsecured credit to semi-formal businesses, but pivoted 18 months ago to begin lending to micro and small businesses directly.
Through the Numida mobile app, business owners can access unsecured working capital loans of up to $3,500 in less than two hours. Thanks to a proprietary credit score, Numida offers risk-based pricing on an applicant’s first loan such that every business owner is treated uniquely.
So far, Numida has provided more than $2 million in unsecured credit to 3,000 micro and small businesses in Uganda with outstanding collections, repayment rates, and client retention.
It has now closed a $2.3 million seed round led by pan-African payments leader MFS Africa, with participation from DRK Foundation, Equilibria Capital, and Segal Family Foundation alongside angel investors. With this new financing, Numida plans to expand aggressively in Uganda and pilot in a new market.
Numida will tap into MFS Africa’s pan-African experience and use its infrastructure, including its recent acquisition of digital payments aggregator Beyonic, to launch new digital financial products for micro and small businesses.
Patrick Gutmann, a managing director at MFS Africa who led the deal, said the acquisition of Beyonic had significantly expanded MFS Africa’s business in the East African region and broadened its portfolio of services by adding a cutting-edge payment proposition targeting the SME segment.
“MFS Africa is committed to supporting this critical segment, and offering a lending solution is a natural extension of our services, and by partnering with Numida, this can become a reality. Numida has been a long-standing partner of MFS Africa, and we have followed its progress with much excitement,” he said.
“We see tremendous opportunity for Numida and MFS Africa to work together to grow Numida’s existing loan book in Uganda, but also see an opportunity for the solution to be extended across the MFS Africa footprint.”