MFS Africa leads Ugandan fintech company's $2.3m seed round
Numida, a Uganda-based fintech business, has closed a $2.3 million seed round led by pan-African payments company, MFS Africa, with participation from DRK Foundation, Equilibria Capital and the Segal Family Foundation alongside angel investors. With this new financing, Numida plans to expand aggressively in Uganda and pilot in a new market.
Some 130 million micro and small businesses in Africa need modern digital banking services, including nearly $1 trillion of credit. Although these businesses drive economic growth and contribute up to one-third of the continent’s GDP, due to their size and informality, they are often financially excluded – unable to access credit and other critical financial services.
Capitalising on this opportunity, Numida has built East Africa’s first digital financial institution targeting semi-formal micro and small businesses. 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.
Since launching a major product overhaul 18 months ago, Numida has provided more than $2 million in unsecured credit to 3,000 micro-and small businesses in Uganda. “With all the data that we’re collecting from traditionally thin-file businesses, we are well-positioned to provide additional financial services through the Numida app such as payments, micro-insurance, and deposits in the future,” said Numida’s CEO, Mina Shahid.
Speaking on the investment for MFS Africa, Patrick Gutmann, a managing director who led the deal said, “Through its recent acquisition of Beyonic, MFS Africa significantly expanded its 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. 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.”
Bill Rodriguez, managing director of DRK Foundation which has provided follow-on funding in this round said, “We have been supporting high-impact organisations involved in delivering financial services and creating jobs in Africa for several years. Numida has always stood out as a high performer with a model that can succeed on a continental scale. Now, with the power and reach that MFS Africa brings to the table, we are excited to continue our support and commitment to Numida and its impressive growth.”
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