Uganda-based Numida said to close $2.3m in its seed round

Uganda-based FinTech platform Numida has reportedly scored $2.3m in its seed funding round, which will help it expand across West Africa.

MFS Africa led the round, with contributions also coming from DRK Foundation, Equilibria Capital, Segal Family Foundation and a number of angel investors, according to a report from TechCrunch.

This capital injection will be used to expand across Uganda and pilot its services in other countries in West Africa. One of the countries Numida is eyeing is Ghana, due to the market similarities to Ghana, such as the penetration of mobile money.

Funds will also be used to release new financial services, including payments, micro-insurance and deposits.

Numida, which was founded in 2017, offers a digital platform to help businesses access microfinance, with working capital loans available between $100 and $5,000. Its goal is to improve the access to loans for businesses.

The company initially began life as a bookkeeping tool that would help traditional microfinance institutions (MFIs) supply loans to businesses.

Numida co-founder Mina Shahid told TechCrunch, “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 cash flow data and present it in a form that can be used and incorporated into the underwriting processes.”

However, the MFIs refused to adjust their underwriting processes despite access to the new information. All of the customers that applied for loans were rejected for not having collateral.

Numida changed its focus and built its own underwriting and credit risk processes so it could offer loans to businesses.

The report from TechCrunch claims the FinTech has provided a total of $2m to 3,000 businesses.

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