Factors that have pushed Sumac to the top

By: Oliver Owuor

There are factors that have pushed Sumac to the top. The recent award as the 2nd Fastest Growing Microfinance Bank didn’t come cheap. Some of the factors that have played an important role in this meteoric rise include the fact that Sumac advances loans as low as Sh50,000. The interest rates on loans are low, starting from 1.4 per cent per month, on a reducing balance; and is very flexible depending on target loan product.

Sumac Microfinance Bank is known in the market for its strong asset financing products, especially on motor vehicles and agricultural equipment that go at 16 per cent, as well as business loans. “Once all the documentation has been availed, our turnaround time is 48 hours,” cited Mr Njihia.  Clients pay a 30 per cent deposit on all vehicle purchases while Sumac Microfinance Bank finances the remainder 70 per cent.

Sumac Microfinance Bank is recognized by its partners and upon issuing an undertaking committal letter, the vehicle order is processed allowing the buyer to drive away even before full settlment. “The National Transport and Safety Authority (NTSA) has eased the processing of logbooks and ownership which is done within five minutes through their digital platforms,” he added.

Sumac also has a credit facility for dairy farmers, which is among the best in the market. The firm finances farmers to acquire dairy cattle in a facility that is also insured, to cushion them against any animal losses. “This has particularly opened credit lines to women and the youth in the rural areas where they own no other form of security except livestock, allowing them once they have cleared paying for a facility to take up new onces. We have case studies of women who have grown with us,” he shared.

Other credit products recognize that not all people have sufficient security and are thus pegged on the borrowers’ character, purpose for borrowing and ability to pay, being supported by chattels mortgage such as stocks.  These include working capital trade finance that help business people to meet their daily requirements through letters of credit, bid bonds and performance bonds, LPO financing, invoice discounting and insurance of products. Sumac clientele too, get to enjoy school fees loans at discounted rates.

Sumac Microfinance Bank has savings products that have been uniquely -tailored to meet each and every customer’s needs. For instance, fixed deposit accounts can be held on call for as low as one week. Other fixed deposits can mature on monthly, quarterly or even annually at attractive interest rates of up to 14 per cent per annum. Current accounts attract cheque books while Savings Accounts pay at least 7 per cent interest per annum.

The firm has leveraged on innovation through its M-banking platform. “We are soon, this last quarter of 2018, moving to online banking as we have a very vibrant core banking system,” Mr Njihia offered. But it is the Sumac Mobile Loan app that will probably shake the market as it will disburse loans at friendly interest rates, making financing available to those who need it most.

Sumac is licensed to operate foreign exchange within its branch network, which involves the buying and selling of all major currencies to facilitate international business. The bank now has over 20,000 clients who continue to grow at 30 per cent per year.  The CEO attributes this growth to a desire to be able to meet the requirements of Sumac customers.

The microfinance banking institution also offers unsecured small business loans for start-ups. “Someone could be having good ideas but they may lack in the collateral,” he added. Before disbursing a loan, the customer credit rating is vetted based on how they operate their account(s). “Their credit reference informs our decisions on financing and the perceived risks,” Mr Njihia added. The customer base has also grown through referrals as existing customers introduce people known to Sumac.

The bank was ranked the 2nd fastest growing microfinance bank in 2017 by Think Business Banking Awards, which Award was given in June 2018. “We could have grown further were it not for political challenges that affected us economically,” he added. Mr Njihia maintained that the firm has built lasting relationships with its clients and is able to extend a hand to them during hard times. “This is partly as to why our clients have come back to us even after banks lowered on their interest rates on loans following the interest capping law,” he offered.

Besides its website, www.sumacmicrofinancebank.co.ke, the firm has a strong presence on Social media and dispatches marketers to meet their existing and prospective clients business every day.

Sumac Microfinance Bank is a business that cares about the environment in which it operates in and has been involved in various corporate social responsibility initiatives in the environment in which it operates in.  For many years, upto 2017, Sumac has been supporting Thika Rescue Center, a children’s home in Thika town. This August, the firm will be the anchor sponsor at the Ruiru Dam Marathon.

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