NAIROBI, Kenya, Nov 5 – Vehicle assembler Isuzu East Africa has delivered 45 Isuzu NQR 33-seater buses worth Sh238 million to Metro Trans PSV Sacco in a vehicle leasing deal with Co-op Bank.
This is part of one hundred 33-seater Isuzu buses availed to the PSV sector three months ago in an asset financing deal with Co-op Bank where no deposit is required.
The buses which sell for Sh5.3 million each, are the largest fleet delivery the auto has managed to put together for the PSV sector in one deal.
The lease agreement is expected to support growth and the return to business for PSV operators who had been severely affected by the recent Covid-19 lockdown and travel restrictions.
Speaking at the hand-over ceremony for the first 45 buses to Metro Trans PSV Sacco, Rita Kavashe, Managing Director, Isuzu East Africa 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 which were hardest hit by 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. Today we are delivering 45 more buses as part of the target 100 buses valued at Sh530million,” she said.
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.
Rita further explained that the transaction was a good demonstration of local companies coming together to support locally manufactured products. “This is yet another classic example of how the Buy Kenya, Build Kenya initiative can support our economy,” she 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 installments against the cost of the vehicle as it continues to generate revenues for them,” he explained.
While receiving the 45 buses, Oscar Rosana, CEO and Chairman, Metro Trans 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 44.5percent 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, Co-operatives and public sector with an extensive client base to whom leasing is a welcome development.