By JAMES ANYANZWA

Sumac Deposit Taking Microfinance (DTM) Ltd is in talks with strategic investors with a view to injecting an additional Sh500 million in capital into the business.

 The company, which was authorised by Central Bank to collect deposits from the public last year, is seeking to strengthen its financial muscle, attract more business and prop up its lending capacity.

 The DTM is seeking to reach out to a large portion of the Small and Medium-sized Enterprises (SMEs) market through a non-collaterised lending model.

 Non-collaterised lending   has attracted overwhelming interest from many entrepreneurs most of whom lack tangible assets such as land and car logbooks to act as security.

 “Shareholders have been pumping funds into this business but we thought it would be much better if we looked for other like minded individuals to grow the business to the next level,” company chairman Kibatha Njoroge told The Standard in an interview

He disclosed that the firm is seeking funding to the tune of Sh0.5 billion.

Strategic investors

Sumac DTM currently rides on a mere Sh140 million worth of share capital with the monthly loan book seesawing between Sh30 million and Sh40 million.

 “We are already in discussions with strategic investors. There are several investors who would like to be part of our success and dream,” said Njoroge.

 Njoroge explained that the process towards the recapitalisation of the company has started in earnest and due diligence work is already underway.

 “We are in the due diligence stage. We have agreed to open ourselves for inspection,” he said.The company is seeking to boost its presence in the SME market with hopes of attracting four customers in three years.

 “We want to make an impact in peoples’ lives. The largest chunk of our lending is non-collaterised. This is a niche that is not served,” Njoroge stated.

Shared payment

The Sumac DTM has also entered into an agreement with Kenstwich Ltd that would see its customers access shared payment platforms such as automated teller machines (ATMs).

 Among the company’s loan products include the individual, group and corporate savings account, insurance premium financing, SME business loans, asset financing, local purchase order (LPO) financing, bid bonds and professional financial advice.Njoroge stated that the aim of the firm is to serve both the under-banked and the unbanked.

 “We would like to go into serving the SME market. Banks intimidate the ordinary borrower. Our model is based on the integrity, character and ability of the customer to meet his/her loan obligations,” he added.

 Sumac DTM started as a chama for business people before expanding to a group of 20 people who were mostly professionals in various fields such as doctors, accountants, engineers and lecturers.  In 2007 and 2008 the company began converting into a deposit taking microfinance.  CBK granted the licence last year.