Grace Ashiru
- Numida, a Ugandan fintech firm, has received $12.3 million in equity and debt pre-series A investment to scale the continent.
- Serena Ventures led the round, and investors, including Breega, 4Di Capital, Launch Africa, Soma Capital, MFS Africa, and Y Combinator, participated. In addition, it was given a debt of $5 million by Lendable Asset Management.
- Numida wants to reach its goal of giving loans to 40,000 businesses in the next 18 months by entering two new African markets and giving loans to another 10,000 businesses.
Mina Shahid, Catherine Denis, and Ben Best started Numida in 2017. It gives credit to micro and small businesses that aren’t very formal. To expand access to financial services in developing countries, the company intends to concentrate its digital lending operations on providing capital to small enterprises.
Loans from $100 to $5,000 are given to businesses in its portfolio, with interest rates ranging from 10% to 16%.
Numida considers several factors, including the industry and the cash flow, when deciding whether or not to extend loans to a company.
New applications and established firms that want extra credit have to wait up to 24 hours, whereas loans for current customers who are in good standing are promptly authorized.
The company’s credit scoring system is based on the loans it has given to customers and the business profiles of those customers.
It also says it’s different from most online lenders because it doesn’t base loans on information from clients’ phone books or social media accounts.
Numida says it has grown more than 7.5 times because so many people are looking for short-term loans.
After increasing its monthly volume from $250,000 to $2 million, the company reports that it has distributed a total of $20 million in working capital to micro and small businesses.
In addition, the value of the loans is anticipated to increase as the startup maintains its practice of receiving debt funding from organizations such as Lendable.
In the meantime, the company will keep changing its products to make them less expensive.
