Sumac acquires funding war-chest to empower businesses


Sumac Microfinance Bank has mobilised Sh375 million in capital injection that will enable the micro lender compete for a bigger market share and implement an ambitious growth strategy.

The deposit taking lender has secured Sh150 million from Triple Jump of Mexico, with the first tranche of Sh75 million having been released in December last year and the second of the same amount set to be availed this year.

The MFI has also received Sh150 million from the Regional MSME Investment Fund for Sub-Saharan Africa (Regmifa), Sh45 million from the Development Bank of Kenya and Sh30 million from the Micro Enterprises Support Programme Trust (MESPT).

The funding, which is in the form of debt, will enable Sumac MFB battle for a bigger share of the micro credit market where it is hoping to tap more micro, small and medium enterprises (MSMEs).

The funding will also help shore up its working capital at a time when it is implementing an ambitious growth strategy anchored on branch expansion, invest in technology and improvement of customer service.

Sumac MFB is also in discussions with other potential investors seeking for an equity stake in the fast-growing lender.

“As a bank we want to build a strong capital base with a target of mobilising funds for on-lending to MSMEs at competitive interest rates,” said Sumac MFB chairman Kibatha Njoroge.

He added that both Triple Jump and Regmifa boards approved the funding after undertaking a thorough due diligence of the bank, which is one of the deposit taking microfinance banks licensed and regulated by the Central Bank of Kenya (CBK).

The securing of the funding companies when Sumac MFB is engaging in a branch network drive following the opening of the Nakuru branch in December last year, bringing its branch network to four. This follows the opening of the Githunguri branch earlier in the year.

The branch will enable the bank target the agribusiness market in Rift Valley and Western Kenya as it pushes ahead with plans to open branches in Eldoret, Kisumu and Meru this year.

With a customer base of 10,000 and loan book of Sh700 million, Sumac MFB is targeting to grow its loan book to over Sh1 billion this year.

“We are determined to implement our business model and growth strategies which are geared at financing the growth of MSMEs which are critical in economic growth and job creation,” said Njoroge.

CBK data shows there are 13 regulated deposit taking microfinance banks (MFBs) in the country with assets amounting to Sh72.5 billion. The market is dominated by three microfinance banks that control an aggregate market share of 90 per cent.