Ugandan fintech startup, Numida has raised $2.3 million in seed funding.
The seed round was led by Pan-African payments company, MFS Africa with participation from DRK Foundation, Equilibria Capital, Segal Family Foundation and other angel investors.
MFS Africa seems to have developed a penchant for backing Ugandan startups as its notable investment activity was in June 2020 when it acquired fintech startup, Beyonic for an undisclosed amount.
Numida CEO, Mina Shadid sees the investment and support from MFS as crucial to realising the startup’s ambitions to scale across Africa.
We were concerned about scaling across the continent and who would be the best partner for this. We thought MFS has a lot of expertise and footprint on the continent that will allow us to scale moving forward.
Backed with new funding, the startup is looking to pilot in a new market outside East Africa, with Ghana a likely location. Numida will also introduce additional financial services such as payments, micro-insurance and deposits to customers.
Founded by Mina Shahid, Catherine Denis and Ben Best in 2017, Numida is a Uganda-based fintech startup working to democratise access to credit for Africa’s micro and small businesses.
Numida is targeting up to 22 million African small businesses that are in need of loans. Through the Numida mobile lending app, small businesses can apply to access working capital loans of up to $3,500 in less than two hours, according to the company.
According to the African Development Bank, only 20% of African SMEs have a line of credit. The total credit need for formal SMEs in sub-Saharan Africa alone is about $100bn, the highest figure compared to other emerging market regions, according to McKinsey.
Numida also offers businesses a record-keeping platform called TrackApp. This solution enables these enterprises to build financial track records that position them to make better business decisions and prove their creditworthiness to potential lenders.
CEO Shadid said, “one of the major reasons why financial institutions don’t give loans to these businesses is because they don’t have good financial track records and cash flow history.
“That was the problem we set out to solve — to create the mechanisms to get that cashflow data and present it in a form that can be used and incorporated into the underwriting processes,” he added.
According to Shadid, Numida has so far disbursed over $2 million in unsecured credit to 3,000 micro and small businesses in Uganda, at a rate of about $250,000 per month inclusive of outstanding collections, repayment rates and client retention.
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