How Co-op Bank became a trailblazer with asset finance in Kenya

On any ordinary day, it is never easy to get asset finance in Kenya. The process and terms are usually tedious. Granted, things have been particularly the past one year due to the effects of the rampaging coronavirus pandemic. With lenders restructuring loans worth billions of money, very few have been willing to extend new financing to customers.

However, one lender has remained distinguished in asset finance in Kenya way before the onset of corona and during the corona period. This lender is the Co-operative Bank. Even amidst the pandemic, a spot check on asset financing options by Bizna Kenya shows that this bank has been setting the pace.

Last year, Co-op Bank launched a partnership with Isuzu East Africa that would enable customers to accelerate their businesses with vehicle financing. Under the partnership, Kenyans can now apply and the get the powerful Isuzu FRR at a financing arrangement of up to 95 per cent at Co-op Bank. Customers also get a two month repayment holiday for your Isuzu FRR loan. In the same vein, they are able able to repay this loan through one of the longest re-payment periods in the market of up to 5 years. The icing on the cake is the eligibility to get a business loan of up to Sh. 500,000 to ensure that their new truck business gets a good head start.

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This, though, is not the only financing programme that the bank has been trailblazing. Co-op Bank has a strategic financing partnership worth Sh. 1 Billion that is enabling institutions such as schools, churches, universities and fleet owners to purchase or lease Mercedes Benz buses. Customers who qualify for the scheme have the option of purchasing buses with financing of up to 95 per cent. They can also acquire more units through 100 per cent leasing for an extended period of up to 60 months. What’s more, to help customers acquire the bus they need with a payment they can afford, schools and colleges can have payments correspond with school terms for easier cash flow management. This scheme is available to both Co-op Bank customers and non-customers who want direct acquisition of the vehicles, or for leasing.

In addition, Co-op Bank has a partnership with Toyota Kenya that can help you purchase commercial and personal vehicles under Toyota Kenya’s portfolio, including Toyota, Suzuki, Hino and Yamaha. Customers are only required to deposit a down payment of 5% to purchase the vehicles, with financing of up to 95% provided by the bank. In addition, repayment of this loan is for a long period of up to 60-months.

The bank has not left matatu saccos out in the cold. In November last year, Metrotrans Sacco, one of the leading PSV transport Saccos operating in Nairobi, received 45 new buses at Isuzu East Africa with financing from Co-op Bank in form of a lease worth Sh 225 Million. The buses were financed through Co-op Bank’s leasing arm – Co-op Bank Fleet Africa. Under the leasing agreement, Metrotrans will lease the buses for a period of four years after which they will be sold to individual Sacco members including drivers.

According to financial analyst MaryAnne Kemboi, these programs have captured the core needs of customers whose businesses rely heavily on vehicle transportation. “These products mean that a customer can get both the asset and the capital to actualize their business goal without too much repayment burden,” she says. “It also means that the lender is creating value proposition by ensuring that is everyone can get something under its asset finance program.”