Kenyan Co-op Bank’s leasing arm bags Sh890mn State’s fleet deal

Co-operative bank’ joint venture leasing arm, Co-op Bank Fleet Africa Leasing Ltd has won a Sh890million leasing contract deal from the government.

Co-op Bank Fleet Africa Leasing Ltd is a joint venture between the Co-operative Bank of Kenya and global leasing brand Super Group, a South African based firm operating locally as Fleet Africa Limited.

The transaction deal, the firm said is part of a larger Sh2.2 billion deal that will facilitate the financing and delivery of a fleet of 125 vehicles to the Ministry of Interior, the National Police Service and the Prisons Department.

Co-op Bank will act as the financier, with Co-op Bank Fleet arranging the leasing in collaboration with motor vehicle dealers Isuzu East Africa Limited who are to deliver the fleet made up of trucks, pickups and buses.

The new entry by Co-op Bank Fleet is seen by the firm to rapidly stamp its presence and redefine the leasing game, hoping to ride on Co-op Bank’s expertise in SME banking and client in financing SMEs, Co-operatives and the Public Sector, while Super Group delivers its proven expertise in customer screening, risk management and product structuring.

“Super Group Limited is an established global leader in leasing business operating in three continents and is listed on the Johannesburg and Sydney stock exchanges. This partnership between Co-op Bank and Super Group is mutually beneficial as it taps the synergies created by the joint venture,” said Co-operative Bank Group Managing Director Gideon Muriuki.

Muriuki said the leasing business will provide an opportunity for the bank to better support customers to acquire the assets, technologies and equipment they require at the same time enable the bank diversify its income streams.

Leasing is gaining traction in Kenya with the government setting the pace notably by opting to re-tool, equip and modernize the National Police Service by way of leasing, with experts predicting further growth.

Leasing is widely being seen a 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.