The new subsidiary will mainly be looking at assets such as motor vehicles as well as focusing on leasing equipment in the fast moving consumer goods, construction and healthcare sector.
NIC Bank Group Managing Director John Gachora said the move to set up the new subsidiary fits into the bank’s aggressive growth strategy, especially in the asset finance space, which has become very competitive over the last few years.
Gachora said the company is targeting the government as well as counties especially in the leasing of motor vehicles and medical equipment.
“In 2013, the government entered into a Sh3 billion leasing deal with a local car dealer to lease vehicles to the Kenya Police Service. Even more recently, we have seen the government, led by the President, roll out a programme to lease medical equipment worth Sh38 billion to boost healthcare in the counties and the country as a whole. ”
“This is a sign of the potential leasing has in this market. We have also seen interest from private companies, especially in the construction sector where they lease large construction equipment, “he said.
The bank is also rooting on the recent discovery of oil reservoirs in the northern part of the country that will also further spur the growth of leasing.
“Oil exploration and mining are capital intensive ventures and thus our role as financial services providers will be to support investors to lease the infrastructure they require to enable them to run and grow their businesses, “he added.
Leasing in Kenya has an estimated penetration rate of six percent compared to the global rate of 38 percent with Information Technology (IT) equipment, vehicle and construction equipment as the primary source.
NIC Leasing LLP joins other NIC Bank subsidiaries that include NIC Securities, NIC Capital, NIC Insurance Agents and our two regional subsidiaries in Tanzania and Uganda.
Last year NIC Bank raised Sh5.5 billion through a bond issue and another Sh2.1 billion through a rights issue.