3 Ways Co-op Bank Fleet Will Grow Your Business

  • The Co-operative Bank of Kenya, together with the leading leasing company, Super Group of South Africa, on Tuesday, reiterated a partnership aimed at growing their customers' businesses.

    During the first board meeting held on Tuesday 4th June 2019, Mr. Murugu, the Chairman of the Board of the Co-operative Bank of Kenya was elected Chairman of Co-op Bank Fleet Africa Limited.

    At the same meeting, Mr. Robert Mbugua was appointed as the founding Chief Executive of Co-op Bank Fleet Africa Limited. Robert spent a significant portion of his senior professional life in South Africa. He served as a Partner in the Johannesburg office of PwC followed by a stint as a Regional Managing Director in Standard Bank’s Africa business. He has been tasked with specific mandates to fully leverage opportunities offered by the joint venture partners - Co-op Bank and Super Group -  to best serve clients of the new company.

    Through a joint venture titled 'Co-op Bank Fleet Africa Leasing Limited', also known as 'Co-op Bank Fleet', the bank intends at penetrating and growing a modern leasing business aiming at market leadership, securing long-term partnerships and joint ventures to sustainably support growth and build on world-class competencies in supply chain among others.

    In January of this year, the new partnership cemented itself as a long-lasting solution of the leasing industry players especially after successfully concluding its first leasing deal worth over Ksh890 million.

    This maiden transaction, which is part of a larger Ksh2.2 billion deal, entails the financing and delivery of a fleet of 125 vehicles to the Ministry of Interior.

    Leasing is gaining traction in Kenya with the government setting the pace notably by opting to re-tool, equip and modernize public institutions by way of leasing.

    According to Co-operative Bank Group Managing Director & CEO Dr. Gideon Muriuki, "Co-op Bank Fleet enables the bank to better support customers to acquire the assets, technologies and equipment they require at the same time enable the bank to diversify its income streams.”

    This ensures that customers do not have to fully buy equipment which are quite pricey but can hire them for a significantly reduced fee.

    Experts say the availability of leasing implies that it does not make commercial sense any longer to buy assets to own, whereas you can hire to use them as and when you need them.

    Leasing is widely being seen as the most cost-effective model of acquiring business assets. “Instead of spending all your money buying fixed assets, you can actually lease assets, you’ll be able to lease a lot more assets with the same amount of money,” Edna Kihara the Chairperson of the Leasing Association of Kenya was once quoted as saying.

    Secondly you will be able to manage your cash flow. The lump sum requirement for capital items when you are starting up a business, you don’t really require that. You can actually lease and then pay monthly or quarterly installments on the cost of that equipment," continued Kihara.

    This new partnership presents the opportunity to fully cut costs while maximizing revenues in all industries.

    In agriculture, experts say farmers can quickly mechanize food production by leasing farm and irrigation equipment, storage, refrigeration and transportation vehicles.

    Some players feel that investors in Public Service Transport should stop buying the vehicles to own, as they can simply lease.

    Other sectors that are expected to drive high uptake of the leasing product include Oil and Gas, Co-operatives, Manufacturing, Construction, Transport, Mining and ICT.