Isuzu East Africa, the commercial vehicle assembler, has announced a vehicle leasing deal with Co-op Bank that will give two PSV Saccos access to a hundred 33-seater buses. In the asset financing deal, the Isuzu NQR 33-seater buses which sell for Ksh 5.3 million will be available to members of Metro Trans and Super Metro Saccos without a deposit.
Valued at Ksh530 million, it is thought to be 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, Mr Wanjohi Kangangi, Isuzu East Africa Sales & Marketing Director said this initiative was prompted by the need to support the economic recovery.
“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,” Mr Kangangi said. “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.”
The lease agreement’s main advantage is that PSV operators do not need to pay a deposit to get a vehicle on their fleet. 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.
Mr Kangangi explained that the transaction was a 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.
Mr Robert Mbugua, Chief Executive Officer of Co-op Bank Fleet Africa Leasing Ltd, said the lease arrangement was an innovative way by the bank to support PSV customers to acquire 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 installments against the cost of the vehicle as it continues to generate revenues for them,” he explained.
While receiving the 25 buses, Mr Mwangi Nduki, Chairman, Super Metro PSV Sacco, who was elated by the leasing transaction, said: “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, having created a niche in the SME sector, cooperatives and public sector with an extensive client base to whom leasing is a welcome development.