Co-op Bank Fleet gets off to a roaring start with a Kes 890 million government fleet deal
Co-operative Bank’s joint leasing venture with South African logistics firm Super Group is set to deliver a fleet of 125 vehicles to the Ministry of Interior, the National Police Service and the Prisons Department.
The The new leasing firm known in short as ‘Co-op Bank Fleet’ inked its first leasing deal with the government which is worth over Kes 890 million.
The Co-operative Bank is 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 of 125 vehicles. The fleet comprises of trucks, pickups and buses.
Support customers to acquire assets
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.
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.
Co-operative Bank Group Managing Director and CEO Dr. Gideon Muriuki said that the leasing business provides 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.
Experts also point out that sale and lease-back allows organisations to shed heavy cost of carrying assets in their balance sheets, but still have access to use those assets. This is by selling off the assets they already own, and then simultaneously lease them back to use.