- Numida, a Ugandan fintech startup, has raised $12.3 million in a pre-series A round — equity and debt — to expand across the continent.
- Serena Ventures led the round, with participation from Breega, 4Di Capital, Launch Africa, Soma Capital, MFS Africa, and Y Combinator. It also received $5 million in debt from Lendable Asset Management.
- Numida plans to extend loans to an additional 10,000 businesses to reach its 40,000 targets within the next 18 months by entering into two new African markets.
Launched in 2017 by Mina Shahid, Catherine Denis, and Ben Best, Numida provides credit to semi-formal micro and small businesses. It intends to focus its digital lending business on small businesses as part of its strategy to increase financial inclusion in emerging markets.
Businesses in its portfolio receive loans ranging from $100 to $5,000, with interest rates ranging from 10% to 16%.
When determining credit, Numida considers various aspects of businesses, including the sector and cash flow.
Existing clients in good standing have their loans approved immediately, but new applicants and existing businesses seeking more credit must wait up to 24 hours.
The company employs its credit scoring model based on the loans it has made to customers and business profiles.
It claims it also differs from most digital lenders in that it does not use data from clients' phone books or social media accounts as a condition for lending.
According to Numida, it has grown more than 7.5 times due to a surge in demand for short-term loans.
The company says it has issued $20 million in working capital to micro and small businesses, having grown from $250,000 per month to $2 million.
Moreover, the value of loans expects to rise as the startup continues to receive debt financing from institutions such as Lendable.
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In the meantime, the company will continue remodelling its products to make them more affordable.