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Lender enters leasing in deal with asset subsidiary firm

Instead of spending all your money buying fixed assets, you can lease assets.

In Summary

• As the world progressively moves to Uber-style economic models that are asset-light, leasing can only grow.

• The fleet firm is concluding its first leasing deal worth over Sh890 million made in January.

Chairman of Co-operative Bank John Murugu, CEO of Fleet Africa Phillip Smith and Group Managing Director & CEO Co-operative Bank Gideon Muriuki exchange documents following the sign-off the joint venture strategic partnership arrangement in leasing business.
Chairman of Co-operative Bank John Murugu, CEO of Fleet Africa Phillip Smith and Group Managing Director & CEO Co-operative Bank Gideon Muriuki exchange documents following the sign-off the joint venture strategic partnership arrangement in leasing business.
Image: courtesy

Global leasing company Super Group of South Africa, has partnered with local lender to open the Co-op Bank Fleet Africa Leasing Limited.

 

The fleet firm is concluding its first leasing deal worth over Sh890 million made in January.

The transaction is part of a Sh2.2 billion deal, entailing the financing and delivery of a fleet of 125 vehicles to the Ministry of Interior.

 

Managing director Gideon Muriuki said it does not make commercial sense any longer to buy assets to own, whereas one can hire to use them as and when needed.

"As the world progressively moves to Uber-style economic models that are asset-light, leasing can only grow,” Muriuki said.

Sectors such as agriculture, public service transport, food handling equipment such as milk coolers and construction equipment are some that have played in the lease-back arrangements to shed heavy costs of carrying assets in their balance sheets.

Other sectors that are expected to drive high uptake of the leasing product include oil and gas, co-operatives, manufacturing, construction, mining, and ICT.

“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,” he said.

 

The Johannesburg and Sydney Stock Exchange-listed Super Group will provide customer screening, product structuring and risk management.