Deluxe Motors & Bank of Baroda, sign asset finance deal

Bank of Baroda has today signed an asset finance deal with Deluxe Motors  that will see the lender finance up to 90% of all Ashok Leyland trucks and buses.

In a bid to ease the financial load in the current business environment, new and repeat customers will in addition enjoy discounted loan facility fees. The Small and Micro Enterprise sector, which is the largest employer in Kenya, will be the biggest beneficiary of this unique financing partnership, which will run for the next one year.

The partnership will offer customers up to 90% Financing on reducing balance over a maximum tenor of 60 months. In addition, customers will receive a grace period of 90 days after the vehicle release date before loan repayment with all loan application charges waived

Ameet Shroff, Managing Director Deluxe Trucks & Buses E.A. Ltd said: “Financing has been a key driver for businesses to take up assets that will help them drive up their production and recover after a period of suppressed economic activity. We envision this partnership with Bank of Baroda helping our customers be able to get the vehicles they need from their businesses and also get a 90 day repayment holiday which will enable them to manage their cash flows.”

According to Vinay Rathi, Managing Director Bank of Baroda, Kenya; “This asset finance deal comes at the right time as we look to help business grow. At Bank of Baroda, we are on a continuous journey to forge partnerships that are beneficial to our customers. We are proud to partner with Deluxe Trucks on this vehicle financing package with for the Ashok Leyland trucks. As a bank our highest priority and commitment to sustain our customers’ businesses remains unwavering.” He added.

The move comes as the construction sector is projected to grow driven by government infrastructure projects.

Latest data from the Kenya National Bureau of Statistics (KNBS) indicate that the industry defied the COVID-19 economic fallout in 2022 to record its fastest growth in five years.

The Economic Survey 2021 shows that the industry, which comprises buildings, roads and railway, grew 11.8 percent in 2020 compared with 5.6 percent in 2019, driven by mega road projects.

According to the survey, the accelerated growth was attributed to the continued investments in road infrastructure by the government and expanded construction in the housing sub-sector.

In May, Kenya banned the importation of trucks with load capacities of 3.5 tonnes and above effective July 1, 2022.

In the notice issued by Kenya Bureau of Standards, tractor heads and prime movers not older than three years will continue to be imported until June 2023 after which only new units will be allowed in.