ISUZU SIGNS LOANS INTEREST WITH NCBA

By Douglas Muriithi

Kenya’s leading commercial vehicle assembler Isuzu East Africa has signed a deal with NCBA to maintain the interest rate on loans for their vehicle customers at 13%, despite the removal of the interest rate ceiling in late 2019.

Customers will also enjoy loan tenors of up to 5 years, up to 95% financing for purchase of new vehicles and a 60-day repayment grace period from the onset on their choice of Isuzu vehicles.

About 90% of Isuzu East Africa’s sales is in the commercial vehicle segment with the bulk of clients coming from Small & Medium Enterprises (SME), who borrow from banks to finance their purchases.

Speaking at the signing ceremony, Charles Kariuki, Director Finance & Strategy at Isuzu East Africa assured Isuzu SME customers that they’ll continue to enjoy the 13% rate from the bank, which was formed after the recent merger of NIC and CBA banks.

“Although the business environment is very dynamic, our customers seek predictability when it comes to their monthly obligations.

This segment is very sensitive to the cost of credit which means a change in interest rates can affect their cash flows and monthly loan repayments,” said Kariuki.

The removal of the rate cap late last year has caused uncertainty in the market as customers await to see what action the banks will take.

The general expectation has been that the banks will increase interest rates.

On his part, NCBA Group Director of Asset Finance and Business Solutions, Alan Dodd said the partnership with Isuzu represents another step forward in ensuring SME customers have available and competitive financing.

“This deal builds on our extremely successful partnership with Isuzu dating back to the 1950’s.

It gives customers a raft of mitigation measures on their repayment plans by providing additional business support in case of a disruption to their business.” said Alan.

He further stated that the move to offer customers access to affordable credit will certainly stimulate business growth and subsequently create jobs.

According to Alan, the deal reinforces NCBA’s commitment to the Kenyan market by providing a truly compelling well structured financing proposition to its growing clientele.

NCBA Group Director of Asset Finance and Business Solutions, Alan Dodd said the partnership with Isuzu represents another step forward in ensuring its dealers and customers have available and competitive financing.

“This campaign builds on our extremely successful partnership with Isuzu dating back many years.

It gives customers a raft of mitigating reasons why they should buy Isuzu products with NCBA financing, including insurance cover for disruption to their business following an accident.” said Alan Dodd.

In 2016 the government capped interest rates on loans at 14% in a move intended to make credit available to SMEs.

Although the fixed rate created certainty on costs associated with getting loans, banks were more stringent in their assessment of suitable clients.

The control was eventually lifted in 2019 with the Central Bank of Kenya advising banks to be reasonable in revising interest rates.

Charles Kariuki, Isuzu EA Director Finance & Strategy, further explained that the latest deal with the NCBA would assist SME customers purchase home-grown quality products backed by superb aftersales services offered by a network of Isuzu dealer service centres across the country.

“We recognize that our customers would like to purchase vehicles but do not know how the loans market will react.

This deal with NCBA will ensure our customers continue to enjoy our dependable vehicles and service their businesses without fear,” said Kariuki, adding that the campaign call is “Bei ni ile ile, Interest ni Pale Pale.”

Isuzu EA has maintained industry leadership for the last eight years with a 44.5% market share by end of 2019.

The company has been a passionate proponent of the Buy Kenya, Build Kenya initiative to drive the growth and prosperity of the country through a robust manufacturing sector under the Big 4 Economic Pillars.

Isuzu East Africa Ltd (Isuzu EA)

Isuzu East Africa is the leading motor vehicle assembler in East Africa, selling a wide range of Isuzu vehicles.

The company is starting out from a solid foundation established by the Isuzu brand’s automotive excellence over the last 40 years.

The brand has attained strong leadership in this market, selling over 90,000 units since the first Isuzu vehicle rolled out of its Nairobi assembly plant in 1977.

With over 15 models in its line-up, the Isuzu brand has dominated the new vehicle segment for eight years in a row since 2012, achieving a market share of 44.5% by end of 2019.

NCBA Bank Ltd

NCBA Bank Kenya is one of the largest Banks in Kenya by total assets and is recognised as the market leader in Corporate Banking, Asset Finance and Digital Banking.

Asset Financing has been a key pillar and contributor to the overall growth and success of NCBA with the bank commanding a 30% market share.