How Sumac became one of the fastest growing Microfinance Banks in Kenya

Sumac Microfinance Bank was recently highly feted at the Think Business Banking Awards as the 2nd Fastest Growing Microfinance Bank. This hasn’t been an easy achievement. We have since gone behind the scenes to discover what really were the factors that played a major role in ensuring that Sumac came tops.

It is now emerging that the bank has been working to fulfill the grand plan in a Strategic Plan that was drawn a few years ago, and which is in effect right now. The Strategic Plan has since seen the bank make strides in terms of market outreach, clientele growth and product development.

“One of the key objectives in our strategic plan has been to offer affordable and accessible loans to our clients,” says Mr. John Njihia, the bank’s CEO. “In addition to that, the loans are approved with 48hrs of engagement with the client, apart from ensuring that the same is available in a timely fashion in the client’s account.”

Mr. Njihia says that this has endeared many clients to Sumac because the bank has been able to keep its word in as far as processing of loans is concerned. And that’s not all, clients who might have a rough time in repayment have often had discussions so that their loans could be rescheduled in order for them to meet obligations.

Word has reached the market, and in the last three years, Sumac has grown tremendously from a loan book of Ksh458 million to the current Ksh850 million. Deposits now stand at Ksh500 million from a mere Ksh135 million three years ago. This perhaps shows the rapid rate at which the firm has grown.

The bank’s expansion from Nairobi has also contributed immensely to its reach to the markets that were previously untapped. For instance, in the last two years, the bank has been able to open a branch in Githunguri and another one in Nakuru. These two are in addition to the branches in Nairobi (Koinange and Ngara), which were the initial entrants into the market.

“We are looking forward to serving clients in the entire country, and that’s why we are on course to open as many branches in the country as we can,” Mr. Njihia says. “We are also looking forward to have a strong capital base in order to lend to an obviously growing number of prospects who want to do business with us in the long run.”

In the last few months, Sumac has been able to acquire funding to lend to its customers to a tune of about Ksh400 million; and its hoped more will be coming through the pipeline to shore up the lending activities.

“Apart from that, we have presented our customers with the most attractive interest rates for Fixed Deposit and Savings Accounts in order for them to have a genuine stab at investment. We hope this will not only help our clients to grow, but will also shore up our deposit base in the long run,” Mr. Njihia says. “We are offering almost up to 13 per cent p.a. for fixed deposit and up to 7 per cent for Savings. No one gives that in the market today. We are happy that we have taken the lead, and that it is bearing fruit.”

The other factors that have contributed greatly to Sumac’s rapid growth is the bank’s customer service, which has been identified as remarkable.

“We have invested heavily in customer care because the customer is King, and the customer is always right,” says Mr. Njihia. “It is the customer that builds Sumac, that is why our emphasis on quality customer care is quite prominent. It is our conviction that when our customer is happy with our services, then our core objective as a financial institution has been achieved. We are not of any importance to the marketplace if we cannot service our customers properly. This is our calling and our mandate.”

Mr. Njihia says competition has been stiff in the Microfinance industry, but Sumac has stayed relevant and competitive owing to the team’s common ideal in seeking to make the customer happy.

“Our doors are open to you any time and any day,” he says. “Come to us and let’s listen to you and see how we can develop a long lasting solution to the challenges you are facing in the business environment. We are your banking institution of choice.”