Thursday, March 28, 2024

How to protect your import, export business with Co-op Bank insurance

Co-operative Bank of Kenya has opened up a new insurance package where small, medium, and large business owners in the export or import industry can protect themselves from losses.

This is in an effort by the bank’s consultancy and insurance agency, in a move aimed at making the bank the local one-stop shop for financial services.

Strikingly this comes after a directive by the cabinet secretary for National Treasury Henry Rotich in the 2016/17 budget that the Kenya Revenue Authority (KRA) will be requiring importers to use local insurers for marine insurance.

According to a statement from the bank, the kinds of businesses that can be covered ranges from SMEs who import cars, and cargo containers to individual businessmen and women who import personal items like cars or furniture.

According to Elizabeth Ajaji, an expert in the insurance sector, this means that the lady who imports bales of mitumba (second-hand) clothes at Gikomba will no longer have to worry about incurring losses or damage to their goods while in transit, risks of delay, failure of goods to turn up, or receiving goods they never ordered for.

“This is bound to be a relief for the growing import sector that previously had to contend with the possibility of attracting unforeseen marine losses. For instance, the world bank’s Kenya Economic Update notes that import of goods and services are projected to increase by 7.6 per cent this year,” she says.

Interestingly, apart from receiving maritime insurance, business owners will also be eligible for financing. “Apart from running your business insured, we will also be offering loans to ensure that you do not miss out on opportunities or get your cargo delayed due to financial hiccups,” says Co-op Bank in a statement to Bizna Kenya. Other additional services will include money transfer solutions.

One of the main concerns of the local importers and exporters has been the ability of local insurers to handle large imports or exports. However, this is not going to be a concern, with Co-op bank’s capital base and profitability record.

For instance, according to Co-op Bank’s September 2016 results, its core capital was at Sh. 48.8 billion from a net profit of Sh. 10.5 billion. Additionally, by the end of its 2016 financial half year, Co-op Bank’s assets stood at Sh. 363 billion.

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