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.
According to the assembler, about 90% of its’ sales are 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 wait 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 1950s. 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.
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.