Kenya’s leading commercial vehicle assembler Isuzu East Africa has announced a vehicle leasing deal with Co-op Bank that will give two PSV Saccos access to one hundred 33-seater Isuzu buses.
In the asset financing deal, members of Metro Trans and Super Metro Saccos will have access to Isuzu NQR 33-seater buses which sell for Ksh 5.3 million each, without the need for a deposit.
Valued at Ksh 530 million, this is the largest fleet delivery that the auto industry has managed to put together for the PSV sector.
The lease agreement is expected to support growth and the return to business for PSV operators who have been severely affected by the recent COVID-19 lockdown and travel restrictions.
Speaking at the hand-over ceremony for the first 25 buses to Super Metro PSV Sacco, Wanjohi Kangangi, Isuzu East Africa’s Director Sales and Marketing said that this initiative was prompted by the need to support the economic recovery measures.
“The country has been experiencing an economic slow-down caused by the outbreak of COVID-19. Public transportation is among the sectors that have borne the brunt of the pandemic.
To mitigate this, we have through one of our dealers, Central Farmers Garage (CFG) already manufactured 25 vehicles under this leasing deal from Co-op Bank,” said Kangangi.
The lease agreement’s main advantage is that PSV operators do not need to pay a deposit to get a vehicle into their fleets.
This makes access to new vehicles easier for operators emerging from the economic impact of COVID-19.
The deal to the PSV Saccos offers an affordable and flexible hire to use, as and when needed vehicle ownership model.
Kangangi further explained that the transaction was a good demonstration of local companies coming together to support locally manufactured products.
“This is a classic example of how the Buy Kenya, Build Kenya initiative can support our economy,” he added.
On his part, Robert Mbugua, Chief Executive Officer, Co-op Bank Fleet Africa Leasing Ltd said that the lease arrangement was an innovative way for the bank to better support PSV customers acquire the assets they need to grow their business.
“This is a cost-effective way for PSV Saccos to gain access to new vehicles, and then pay monthly or quarterly instalments against the cost of the vehicle as it continues to generate revenues for them,” he explained.
While receiving the 25 buses, Mwangi Nduki, Chairman, Super Metro PSV Sacco was elated by the leasing transaction.
“We are delighted with the payment terms from Co-op Bank, and are optimistic these new Isuzu buses will boost our growth plans for the Sacco,” he said.
Isuzu EA is the largest local assembler of commercial vehicles with 44% market share of new vehicles sold in the country.
Co-op Bank is ranked fifth in the banking sector, has created a niche in the SME sector, Co-operatives, and the public sector with an extensive client base to whom leasing is a welcome development.