Tag: Dr. Gideon Muriuki CEO news

Isuzu East Africa and Co-op Bank Partner to Empower Schools and Businesses through Flexible Vehicle Financing

Posted on by Kibaki Muthamia

Isuzu East Africa and the Cooperative Bank have announced an Asset Finance Scheme designed for schools and businesses that desire easier financing terms to cope with the current operating environment.

A good number of educational institutions and business continue to record reduced cashflows, which therefore calls for easier financing terms.

At an event held at Isuzu East Africa, the motor vehicle assembler’s Managing Director, Rita Kavashe said that:

“Today, Isuzu East Africa, has partnered with the Cooperative Bank to provide solutions that will address the needs of our customers during these challenging economic times. We are thrilled to launch a Financing scheme that provides a ninety five percent Financing option for Isuzu N-series, Isuzu F-series and Isuzu Pickups TFS and TFR Series.”

During the signing of the partnership between Co-op Bank and Isuzu EA for school bus financing. (Image: Twitter).

The current operating environment has affected the ability of many schools and businesses to secure necessary cash deposits for asset purchases.

This financial constraint limits their ability to initiate or expand investments in critical assets.

The Isuzu/Cooperative Bank Asset Finance Scheme provides the financial boost to enable customers raise enough cash deposits for purchasing new vehicles.

“The partnership aims to make vehicle acquisition easier for Kenyan schools and businesses with 100% and 95% asset financing respectively. The financing options cover all Isuzu vehicle models,” Rita explained.

On his part, Cooperative Bank Managing Director and Group CEO Dr Gideon Muriuki, observed that the Bank partnership with Isuzu East Africa is designed to assist educational institutions and business acquire the critical assets they require within their current financing abilities.

“We have observed that a good number of our business customers are giving priority to financing their stocks and operations.

We have therefore made available an additional digital credit of upto Ksh.1 million for MSME customers and Ksh.2 million to schools over and above the 95% and 100% asset Financing.” said Dr. Muriuki.

In addition, Co-op Bank announced that customers will also enjoy an extended loan repayment period of upto 72 months.

Educational institutions will have a one-term moratorium when they purchase the buses, with Repayment extended to 72 months on termly basis, which adds up to 18 terms at 0% processing fee, in addition to a working capital loan of up to Ksh 2 million.

Co-op Bank teams up with eco.business Fund to finance sustainable agriculture in Kenya

Posted on by Kibaki Muthamia

The eco.business Fund has provided its first investment in Kenya in the amount of $10 M to Co-op Bank.

The subordinated loan will be on-lent to sustainable agribusinesses, contributing to the fund’s mission of conserving biodiversity, promoting the sustainable use of natural resources, and mitigating and adapting to climate change.

The investment will provide much-needed financing for businesses to enhance sustainable measures in their agricultural practices, particularly important in light of the challenging operating environment created by the COVID-19 crisis.

Agriculture is the backbone of the Kenyan economy, employing approximately 75% of the rural population, and making up 34% of the country’s gross domestic product.

However, commercial lending to the agricultural sector remains disproportionally low. This funding gap limits the ability of producers and processors to invest in sustainable production practices, further compounded by the economic fallout caused by the global pandemic.

The investment aims to provide financial resources to those that need it most, while simultaneously promoting conservation finance as mainstream.

Co-op Bank is the third largest commercial bank in Kenya, and the primary bank for agricultural cooperative societies.

Through this new investment, the eco.business Fund and Co-op Bank will provide necessary credit to sustainably certified agribusinesses, such as those in the coffee, tea, and horticulture sectors, Kenya’s main agricultural exports.

By financing green measures such as solar and hydroelectric installations for tea factories that reduce reliance on fuelwood, and cold storage solutions that reduce post-harvest losses, the partners hope to boost sustainable production practices and conserve the unique ecological landscape of the country.

Dr. Gideon Muriuki, Co-op Bank Group Managing Director
Dr. Gideon Muriuki, Co-op Bank Group Managing Director

Dr. Jens Mackensen, Chairperson of the Board of Directors of the eco.business Fund, stated:

“We are excited about our fist investment in Kenya: A country rich in biodiversity and opportunities for sustainable development. This new partnership with Co-op Bank promises to be a fruitful one as the bank is well positioned to act as an enabler of sustainable production practices. Only by providing tailored financing to the agricultural sector, a key driver of economic activity and sustainable development in Kenya, can we collectively promote green finance with the goal of generating positive environmental and social impact.”

Commenting on the sign-off of this partnership, the Group Managing Director and CEO of Co-op Bank Dr. Gideon Muriuki said:

“Right from our founding as a bank for agriculture co-operatives, we have always strived to support farmers in their journey to achieve sustainable livelihoods. This new partnership with eco.business Fund that makes available USD 10 Million for on-lending to farmers is a winner on many fronts; it provides financing that is structured to suit the financing cycles of agriculture, and also comes with the support mechanisms to assist farmers to make a successful pivot towards sustainable, climate-smart agriculture.”

The Co-operative Bank jolts banking sector by a record Kshs. 5.1 Billion profit in first quarter 2020

Posted on by Kibaki Muthamia

The Co-operative Bank Group has an encouraging winning angle against the obstacles occasioned by the ravaging pandemic to report a Profit before Tax of Kshs 5.1 Billion for the first quarter of 2020, a performance closely reflecting last year’s 2019 first quarter results. Profit after Tax was Kshs 3.6 Billion.

The Group has a comprehensive mitigation strategy to cancel out an unpredictable working environment demanded by the Covid-19 pandemic. They have a strategy intended to ensure full banking services continue being accessible to customers in a safe environment consistent with the Ministry of Health guidelines. Most attention has been thrust to digital channels, and branches remain open albeit with constant attention to detail to keep clients safe.

The report has a few highlights;

  1. Profit&Loss
  • Total operating income grew by 12.5%from Kshs 11.1 Billion to Kshs 12.5 Billion
  • Total non-interest income increased by 19% from Kshs 4.2 Billion to Kshs 5.0 Billion
  • Net interest income increased by 8.5% from Kshs 6.9Billion to Kshs 7.5 Billion

Total operating expenses grew by 20.6% from Kshs 7.3 Billion on account higher loan loss provision and staff expenses.

  1. Balance sheet
  • Total assets grew by Kshs 44.7% (+10.5%) to Kshs 470.4 Billion from Kshs 425.7 Billion recorded in the first quarter 2019.
  • Net loans and advances book grew by 24.5 Billion (9.8%) to stand at Kshs 276.2 Billion compare to Kshs 251.6 Billion in 2019.
  • Investment in government securities grew by Kshs 22. 9 Billion (+11.5%) to Kshs 115.9 Billion compared to Kshs 103.9Billion in 2019.
  • Customer’s deposits grew by 6.9% from Kshs 317.8 Billion to Kshs 339.6 Billion.
  • Borrowed funds from development partners grew by Kshs 3.7 Billion (+15.5%) to Kshs 27.4 Billion compared to Kshs 23.7 Billion in 2019.
  • Shareholders’ funds grew from Kshs 82.0 Billion (+12.7) from Kshs 72.8 Billion in 2019.This has enabled the bank to continue to pitch for big ticket deals.
  1. Innovative customer delivery platform.
  • Through our multi-channel strategy ,the bank has successfully moved almost 90% of all customers transactions to alternative delivery channels ,an expanded 24-hour contact center ,mobile banking ,584 ATMs, internet and over 16,700 Co-op Kwa Jirani Banking agents
  • A successful universal banking model and the implementation of Sales Force Effectiveness has seen the group serve over 8 Million Account holders across all sectors.
  • Key focus on digital banking ,with all -telco MCo-op Cash mobile wallet continuing to play a pivotal role in the growth of non-funded income with 5.6 Million customers  registered  and loans with over Kshs. 16 Billion disbursed in quarter 1 2020
  • Over 85, 252 customers have taken up the MSME packagers that we rolled  out in 2018, and 5,000 have been trained on business management and planning .We have earmarked  Kshs 15.2 Billion to MSME lending ,with Kshs 12.4 Billion disbursed to date.
  • Our unique model  of retailing  banking services  through Sacco FOSAs enabled us provide  wholesale financial services to over 479 FOSA outlets and issue over 1.8 million Sacco -link cards.

In a press release, Dr. Gideon Muriuki, Group Managing Director & CEO, also gave credence to the bank’s subsidiaries, like The Co-op Bank of South Sudan with a profit before tax of Kshs.20.7 Million before tax in first quarter 2020. Another major one is the Co-op Consultancy and Insurance Agency with a Kshs.250.5 Million contributed as at 31st March, 2020; and Co-op Trust Investment adding Kshs.20.5 Million.

In addition, the Group has re-aligned close to Kshs.15 Billion to cushion their clients servicing loans from the effects of the pandemic. Co-op clients have had loan repayment periods lengthened, adjusted interest moratorium periods and additional funding if need be to ride out the difficult period.

The Board of Directors have also approved the talks leading to 100% acquisition of Jamii Bora Bank Ltd, which has an asset base of Kshs.20.5 Billion. Due diligence for the acquisition is ongoing.

The Co-op Bank foundation also reports providing scholarships to a tally of 7,657 gifted but needy students across the country since inception. These scholarships cover includes full fees from secondary too university level, internships and later job openings.

Recently, Co-op Bank also boosted the Covid-19 Emergency Response Fund with a cash donation of Kshs.100 Million.

In light of these details, it’s not a surprise that Co-op Bank was named Overall Winner of the Kenya Banker’s Association (KBA) 2019 Sustainable Finance Catalyst Award.