How Sumac Made it to the top League

By: Oliver Owuor

Sumac Microfinance Bank was recently recognized as the Second Fastest Growing Microfinance Bank in the Think Business Banking Awards 2018. It comes on the back of the bank’s recent opening of a fourth branch in Nakuru.

This hasn’t come easy, and for Sumac to be afforded this remarkable reputation, the team behind this rapidly growing bank has had to work audaciously every day in order to realize this significant growth.

The microfinance mass market in Kenya is very promising, yet very tricky to hold onto. But Sumac Microfinance Bank has since 2004 hinged on a mass market financial inclusion strategy developed products and credit facilities for SMEs and farmers, growing with them.

Our Mission is to provide financial services and solutions that will empower our customers and other stakeholders.

Our Unique Value Proposition (UVP) is “Setting Standards in Financial Services. When you require prompt, flexible and efficient financial services in a friendly environment, then come to Sumac. We will meet all your financial needs effectively”.

The strategy has seen Sumac grow at 30 per cent every year, affirming its position in the market.

“This is out of a desire to meet our clients’ ever changing needs and expectations,” said Mr John Njihia, the Chief Executive Officer (CEO). Some of Sumac clients have been with them for the last 14 years, growing with the business, which was initially, a credit-only business that advanced its members loans. In 2011, the directors grew it into a DTM and in 2012 it was licensed by the Central Bank of Kenya (CBK).

This gave Sumac Microfinance Bank new financial muscle as it was able to cast its wings wider in services provision, product development and customer catchment. “At the moment, we are managing over Sh500 million customer deposits, from a mere Sh135 million three years ago,” stated Mr Njihia.

Sumac has been able to team up with local and international partners for funding. These include RegmifA and Triple Jump, both from the Netherlands. For strategic reasons, the firm has just partnered with Badoer Investments Limited from Dubai, UAE which has taken over 15.6% shareholding.  “Ricardo Badoer has a vast financial backing, experience in international banking, offshore and digital banking, which is in line with our strategy to join the clearinghouse, and to grow in diaspora banking,” explained the Sumac boss. He added that his firm would ride on the clearinghouse to process cheques rather than do it through other lenders, as well as acquire a SWIFT to enable offshore banking on its platforms. Local Sumac partners include MESPT, Development Bank and Credit Bank.

Customer loans have grown, and currently Sumac is managing a Sh900 million loan book and is operating a balance sheet of Sh1.3 billion.

The bank now has a total of 45 members of staff operating from five service stations.  Two of Sumac’s branches are in Nairobi, one along Koinange Street and the other is at Park Road in Ngara, Mr Njihia said. Other branches are in Nakuru town and in Githunguri, Kiambu County respectively.

The target clientele are small and medium enterprises (SMEs) and farmers. “We have to extend financial inclusion to the bottom of the pyramid,” he added.

Sumac is fully licensed and regulated by the CBK and is part of the 13 registered Microfinance banks in the country. “We have to comply by having at least 70 per cent of our customers drawn from small enterprises, while 30 per cent of our clientele can to be medium enterprises,” Mr Njihia shared.

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