Top Finance Bank obtained a Bank license in September 2014 and is regulated by Bank of Uganda (BOU). We have the backing of both Ugandan and Chinese shareholders. Our strategy in the financial industry is to offer fast, affordable and efficient financial services to all Ugandans.
We however have a strong focus on importers and exporters to and from Asia. Our Mission is to be the leading digital bank that champions financial inclusion in Uganda. As Top Finance Bank, we believe in leveraging on mobile technology in serving the business community and the unbanked.
Why are you focusing on SME finance, and how are you competing with the market’s more established players?
Historically, finance for the SME sector has been fairly limited. However, recently banks, including ourselves, have recognised the significant business opportunity the SME sector offers and competition has increased in line with this.
The large size of the SME market means there is room for several players and we are happy with the growth we are seeing in our market share. We are seeking to develop a client base that is highly engaged in trading activities in Uganda
What products do you offer for SMEs?
We have solutions for the entire working capital cycle for the customers through a wide range of structured trade finance solutions as listed below:
- Import financing
- Stock, storage and inventory finance
- Discounting of receivables / invoices / contracts
- Collateral managed/monitored structures
We also offer vehicle and asset financing for customers who want to invest in their own premises or logistics infrastructure.
In terms of products and services, which areas are witnessing the most demand?
What’s happened in the past one and a half or two years is that most SMEs have experienced high growth in their business volumes, which translates to steeper working capital requirements. So we are seeing increased demand for working capital facilities to finance their working capital cycle. To a lesser extent, there are requirements to finance assets and equipment.
You are currently experiencing high growth among SMEs. What kind of challenges does this bring for businesses?
We see a couple of challenges. First and most importantly, these companies need to manage growth. Typically, most of these are owner-managed, which means that growth beyond a certain size requires them to make a lot of investments in infrastructure, governance and the institutionalization of their business. Some entrepreneurs do that successfully, while others are not as successful.
Secondly, we have encountered diversion of short term funds to real estate which requires long term financing. This mismatch tends to create liquidity gaps and credit defaults
As a result, access to finance has increased and market opportunities are there as well. But it is up to individual businesses to manage growth internally to capture these market opportunities and remain a sustainable business model.
Finally one last word ED
On behalf of Top Finance Bank, I take this opportunity to thank all our customers for their support and we welcome you to the TFB family.