Co-op Bank, leasing equipment firm in Sh1b deal

NAIROBI: Vehicle and Equipment Leasing Ltd (Vaell) has announced Sh1 billion lease partnership with Co-operative Bank of Kenya. The funds will be utilised to service the Government Police Vehicle Leasing Project, through a financing arrangement known as "Wholesale Leasing".

The product allows equipment dealers to negotiate lease deals for their clients through an independent leasing firm who tie up a tripartite arrangement between the dealer, client and bank financing partner(s).

In Wholesale Lease agreements, the suppliers and dealers get the full value of their equipment upfront while Vaell manages the lease rentals on their behalf. Regional Head of Finance Bertha Mvati was upbeat the product would be a big success in the region, saying that "banking, equipment manufacturing as well as the motor dealership industry is excited about the innovative financing model being fronted by Vaell."

Co-op Bank's Head of Asset Finance Joseph Thiongo described Wholesale Leasing as a very attractive asset financing model and "we foresee more uptakes in the near future."

The model entails traditional Vehicle and Equipment dealers offering leasing solutions to their clients by partnering with an existing independent lessor, in this case Vaell.

Unlike traditional asset finance, the wholesome leasing model enables clients to enjoy all benefit of assets without acquiring the title; thus, avoiding inherent risks of ownership while optimising on the capital outlay, as payments are made in instalments.

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VaellCo-operative Bank