Co-op bank dangles a new financing deal to SMEs
By Dominic Omondi | February 5th 2019
Co-operative Bank of Kenya has offered up to 95 per cent financing for the purchase of Isuzu vehicles. This is as it moves to address the challenges of asset financing by small and medium enterprises (SMEs).
The partnership between the lender and Isuzu East Africa will see customers enjoy Sh300,000 working capital to empower their business with the repayment period of five years or 60 months. Borrowers will also enjoy a 60-day repayment holiday.
This comes a few weeks after Co-op Bank Fleet Africa Leasing, a joint venture with South Africa’s Super Group, inked its first leasing deal worth Sh890 million with the Government.
The transaction is part of a larger Sh2.2 billion deal and entails the financing and delivery of a fleet of 125 vehicles to the Ministry of Interior, the National Police Service and the Prisons Department.
Speaking at the signing and announcement ceremony in Nairobi, Isuzu EA Managing Director Rita Kavashe said the programme will enable customers to invest back in their business without affecting cash flow growing their business.
“SME businesses in Kenya have suffered for the last 18 months due to the prolonged election cycle and slow-down of financing to this sector by banks. This has drastically affected the SMEs’ cash flow and ability to invest in their business,” said Kavashe.
Co-op Bank Director for Retail & Business Banking Arthur Muchangi emphasized the need for SMEs to seize the opportunity to re-tool and renew their motor vehicle fleet at very affordable terms. “Through this partnership between Isuzu and Co-op Bank, customers will get up to 95 financing to purchase the vehicle of their choice, and in addition be given two months to use the vehicle before they begin repaying the loan,” said Muchangi.
“This will give customers space to generate cash to service the loan, which is to be repaid over an extended period of four years. For those Isuzu customers who also wish to boost the working capital of their business, we are providing an additional loan of Sh300,000 to be repaid in 12 months.”
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