Isuzu and NCBA Pen Deal to Benefit SMEs
Isuzu and NCBA entered into a deal on Tuesday allowing their customers to access loans at a 13 percent interest rate.
The move is eyeing the small and medium Enterprises who have been keen on the cost of credit.
“Our customers will continue to enjoy the 13 per cent rate from the bank to purchase vehicles and service their businesses without fear,” said Charles Kariuki, Isuzu EA Director Finance & Strategy.
There were expectations from clients of banks increasing their interest rates. Much uncertainty was caused in 2019 after the removal of the cap with clients hoping the the banks would reconsider the cap after.
“This partnership with Isuzu will offer customers access to affordable credit and therefore stimulate business growth,” said NCBA Group Director of Asset Finance and Business Solutions, Alan Dodd.
In 2016, the government sought to make credit accessible to the SMEs by capping loan interest rates at 14 per cent.
Although the fixed rate created certainty on costs associated with getting loans, banks were more stringent in their assessment of suitable clients.
However, the Central Bank of Kenya stepped in, lifting the loan and asked the banks to be considerate when revising the interest rates.
Isuzu EA has been able to maintain its record in the market recording a 44.5 percent market share by end of 2019.