- Under the terms of the agreement, the Bank of Baroda will provide financing for as much as 90 per cent of all Ashok Leyland trucks and buses
- New and returning clients will be eligible for fee reductions associated with lending facilities’ fees
- Customers will be able to obtain up to 90 per cent financing on the reduction of their balances over a maximum term of 60 months
The Bank of Baroda will finance Deluxe Motors’ Ashok Leyland trucks and buses up to 90 per cent in a deal struck on July 14.
New and returning clients will be eligible for fee reductions associated with lending facilities in the current economic climate.
This one-of-a-kind finance collaboration will continue operations in Kenya for the next twelve months. The Small and Micro Enterprise sector, which is the country’s primary source of employment, stands to gain the most from it. It is part of an effort to lighten their overall financial burden.
Customers can obtain up to 90 per cent financing on the reduction of their balances over a maximum term of 60 months, thanks to the cooperation. In addition, consumers will be given a loan repayment grace period of up to ninety days following the date on which their vehicles are delivered, with any and all loan application fees being waived.
“Financing has been a crucial motivation for firms to take up assets that would help them drive up their output and recover after a period of depressed economic activity,” said Ameet Shroff, Managing Director of Deluxe Trucks & Buses E.A. Ltd.
We hope that through our partnership with Bank of Baroda, we will be able to assist our customers in acquiring the vehicles that are essential to the operation of their businesses, as well as providing them with a repayment holiday of ninety days, which will allow them to manage their cash flows better.
This asset finance arrangement is opportune as we want to help the business flourish.
The Managing Director of Bank of Baroda in Kenya, Vinay Rathi, stated, “At Bank of Baroda, we are committed to a never-ending quest to cultivate business relationships to our clientele’s advantage. We are excited to work with Deluxe Trucks to provide this car financing package for Ashok Leyland trucks, and we are proud to be their partner. As a financial institution, our steadfast dedication and top goal are to ensure the continued success of our client’s enterprises.”
Kenya’s Vehicle Market.
According to a report published by an industry association in January 2022, sales of brand-new automobiles in Kenya increased by a factor of one hundred twenty-five in 2021 as the country’s economy recovered from the slowdown brought on by the pandemic that had occurred the year before.
The East African nation has a limited purchasing capacity, which results in a small market for new vehicles. As a result, most buyers in the nation import second-hand vehicles from Japan. In recent years, however, international car manufacturers such as Volkswagen have invested in it because of its growth potential.
The Kenya Motor Industry Association (KMIA) reported that dealers sold 14,250 new automobiles, which is an increase from the 11,086 units sold in the previous year. The number in the prior year was higher than it was before the outbreak. In 2019, the market saw the sale of 13,199 automobiles.
To encourage increased demand for locally made vehicles, the government allotted 600 million shillings, which is equivalent to $5.30 million.
Lorries and Truck Market
The Lorries or trucks and trailers registered in Kenya grew to 7,071 and 3,187 from 6,476 and 2,382 units, respectively, according to the Kenya National Bureau of Statistics (KNBS) data) last year.
However, the number of registered vans and pick-up trucks decreased to 5,986 units from 6,065 units, according to the most recent Economic survey released by the KNBS.
The number of new minibuses and matatus being registered dropped from 1,084 units in 2020 to 822 units in 2021, indicating a reduction in the amount of capital being invested in the matatu business.
This echoes the thoughts that Simon Kimutai, head of the Matatu Owners Association, expressed a year ago when he noted that the losses in the business that the pandemic had caused had stopped investments in the sector.
During the height of the epidemic, Passenger Service Vehicles (PSVs) were only allowed to carry half of their average passenger load, which decreased revenues.