(NAIROBI, KENYA) – Kenyan farmers, businesses and private consumers will gain access to expanded vehicle and agricultural equipment financing under a new partnership between Absa Bank Kenya PLC and Simba Corporation.
The two companies have signed a Memorandum of Understanding (MoU) that combines Simba Corporation’s automotive and agricultural machinery range with Absa’s revamped Asset Based Finance (ABF 2.0) framework.
The partnership is designed to help businesses and farmers acquire high value productive assets while easing the cash flow constraints that can delay investment in transport, agriculture and other commercial activities.
Under the agreement, commercial enterprises and business owners can receive financing of up to 95% of the value of eligible assets, with repayment periods of up to 72 months. The facility will cover heavy trucks, commercial buses, light commercial vehicles and tailored corporate fleet solutions.
Educational institutions seeking school buses will be eligible for financing of up to 100%, with repayment periods of up to 84 months. The longer repayment period is intended to align financing costs with school fee collection cycles and reduce pressure on institutional cash flows.
For agriculture, farmers, primary producers and agribusinesses will be able to access financing of up to 90%, repayable over 60 months. Eligible assets will include tractors, specialised agricultural machinery, utility pick ups and other agricultural mobility equipment.
The facility is intended to support greater mechanisation in Kenya’s agricultural sector, improve farm productivity and strengthen the movement of agricultural goods from farms to regional markets.
The partnership also provides financing for private vehicle purchases. Individuals and families will be able to access financing of up to 95%, with repayment periods of up to 72 months, for passenger vehicles.
Absa Bank Kenya Director of Business Banking Renato D’Souza said access to affordable and flexible financing remained a major challenge for many small and medium sized enterprises seeking to acquire vehicles and equipment.
“For many businesses, particularly SMEs, access to affordable and flexible financing remains a key barrier to acquiring the vehicles and equipment they need to grow, improve efficiency, and compete effectively,” D’Souza said.
He said the partnership would give customers access to tailored asset financing, faster processing and greater flexibility to invest in productive assets.
D’Souza said the initiative forms part of Absa’s strategy to support economic growth, industrial competitiveness and employment through investment by businesses.
He said the partnership also strengthens the bank’s ABF 2.0 proposition, which was launched in the previous quarter to provide Kenyan businesses with financing to expand their operations, create jobs and contribute to economic activity.
Agriculture is a major part of the agreement, with the companies seeking to improve access to machinery that can help producers manage labour requirements, improve land preparation and strengthen post harvest transport.
Simba Corporation Executive Director Suraj Shah said the facility would also make vehicle ownership more accessible to individuals through financing packages with flexible repayment terms.
“The partnership will make vehicle ownership more accessible for individuals through attractive financing packages and flexible repayment options,” Shah said.
He said the agricultural component was particularly important as producers faced the need for greater investment in machinery to manage supply chain disruptions, improve land preparation and transport produce to regional markets.
“For the agricultural sector, the partnership will support the modernization of Kenya’s agriculture industry through financing for tractors, farm machinery, pick ups, and other agricultural mobility solutions,” Shah said.
He said the financing was intended to support mechanised farming, increase productivity and improve efficiency across the agricultural value chain.
The agreement forms part of Absa Bank Kenya’s wider asset financing strategy announced in the previous quarter, under which the bank plans to channel KES 100 billion, equivalent to about $773 million / £593 million / €670 million, into the Kenyan economy over three years.
The strategy targets several sectors, including manufacturing, trade and logistics, physical infrastructure, healthcare and education.
The latest agreement expands the asset financing programme into agricultural machinery, commercial transport and private vehicles, giving customers access to financing through both banking and dealership channels.
The financing package is available through Absa Bank branches and Simba Corporation dealership showrooms across Kenya.
The companies said the application process would include faster credit processing arrangements intended to reduce the time businesses and individual customers wait for financing decisions.