New plan to grow Ford’s vehicle market in Kenya

NIC Bank and CMC Kenya have entered a deal for Ford Ranger vehicles

CMC Motors, the sole distributor of the Ford Ranger vehicles, and NIC Bank, have signed a partnership agreement that will see CMC- Ford customers receive up to 95 per cent financing on all Ford ranger vehicles.

The deal is based on a 60-months-repayment plan, the latest in an effort to grow the uptake of commercial motor vehicles in the country.

This promotion scheme will ease the acquisition of Ford Ranger vehicles as customers will be able to enjoy maximum loan tenure of 60 months; 60 days repayment holiday after vehicle release and insurance services arranged through NIC bank.

Speaking in Nairobi during the signing ceremony of the financing deal, CMC Motors Group CEO Noel Mabuma said: “Given the vast expertise in financial services from Al Futtaim, CMC is proud to launch the interest subvention scheme that will ease the acquisition of the Ford range of vehicles.”

A Ford Ranger customer for example who seeks to purchase a vehicle worth Ksh 4,395,000 (USD 43, 296) will only be required to pay Ksh95,000 (USD935.87 ) for a period of 60 months.

“His or her first payment will only be required after 60-days of vehicle delivery,” Mabuma noted.

With the current financial support coupled with Ford Protect, it is now even easier to own a Ford with peace of mind through CMC, Ford and NIC bank, the two noted in a joint statement.

Ford Protect is a maintenance and service plan available for any Ford in the model line up in Kenya.

“With Ford Protect, all the owner needs to think about is driving, insurance cover and tire replacement. You can choose the premium service offering from three years 60,000 kilometres to eight years for 300,000 kilomteres. The reason for this is the confidence behind the robust workmanship of the products,” CMC notes.

Ford protect can be bundled in the CMC-NIC financing plan and for any Ford Everest and Ranger double cab, it is free for three years covering or 100,000 kilometres  whichever comes first.

NIC Bank Executive Director Alan Dodd has lauded the partnering with CMC, saying it will reinforce NIC position as the leading bank in asset finance in the country.

READ:NIC Bank, Toyota Kenya in unique asset financing scheme

“By virtue of our strengths in our product offering, this strategic partnership for all Ford Models presents a strong value proposition to SMEs and individual customers who are keen on expanding their businesses and buying new assets but face strained cash flows due to ever fluctuating economic situations in the business environment,” Dodd said.

He added that customers will now be able to apply for asset finance loans through the newly launched online portal that is available on the bank’s website. Through this, customers will get approvals in 24 hours, the quickest turnaround time in the market.

ALSO READ:Toyota, NIC Bank offer customers 90 days repayment holiday on cars

Will digital economy in Africa just remain a myth?

World Bank has projected that by the year 2060, Africa’s population will be as much as 2.7 billion people; Sub-Saharan Africa’s population is estimated to be at 860 million.

At the moment, at least 60 percent of Africa’s population is under the age of 25. This figure also indicates that Africa has one of the largest youth populations in the world.

Africa’s economy has to be in proportional progression to keep up with the ever-rising population. Needless to say, the digital economy is indispensable as it intertwines creative and innovative technological solutions that not only reshape traditional marketing endeavors but also changes people’s lives completely.

It is not surprising to see that there is very little understanding of the digital economy in some African countries. Youth are most likely victims in less democratized regimes as such systems impede democracy by limiting active digital spaces for public participation through constructive dialogue on areas such as: investment, free trade, business, and so many others. To overcome this, it is imperative for governments to decentralize their policy formulating processes by opening up to the public in the digital sphere.

The time is also reasonable for African educational institutions to redesign their curriculum by establishing new marketing disciplines that reflect the new digital age. Incorporating this new intellectual development can help youth acquire technological experiences that will dictate how they can participate and benefit in the digital economy, for instance, the evolution of Artificial Intelligence (AI) which has started to replace thousands of workers across the globe. Africa has to put in place viable policies and plans to co-exist with this new development.

Africa must scale up youth-based enterprises by nurturing and empowering their creativity in innovation in areas such as: health, education, industry, agriculture, fishing, forestry, and other crucial sectors. This will create a resourceful pool of vibrant entrepreneurs and new business ventures.

Meanwhile, African nations should look to diversifying traditional markets to e-trade for small and medium-sized enterprises (SMEs). Environments should be favorable for African businesses to leapfrog from local/physical transactions to the international e-transactions which are more frictionless and convenient.

Africa MUST connect. Data, information, and communication are pivotal to transform into the digital economy. Therefore, there is an urgent need to re-examine how smooth internet experience is in Africa if we are ever to allow easy accessibility. According to the Alliance for Affordable Internet (A4AI), in 60 low and middle income economies surveyed, it was found that, ‘at the end of 2017, only 24 met the UN Broadband Commission’s target of affordable cost of a gigabyte of data not costing more than 2% of average monthly income’.

This actually means users were to pay an average of 5.5% of their monthly income for one gigabyte. This should not be a heavy burden. On the contrary, telecoms should lower their network costs to allow more involvement of people especially those in suburbs and rural areas. If they can tailor special/regional packages it would be a strategic maneuver.

There is more to be done.  African governments, the private sector, and relevant stakeholders ought to invest in resilient ICT infrastructures such as: land-based fiber networks and wireless last-mile connections to ensure each individual gains access.

Africa needs an inclusive digital economy such as in the mobile money revolution— a digital economy that lowers inequality and poverty. It should be a digital economy for all, not for the wealthy or literates. Despite the fact that new technology might overthrow existing development initiatives it suffices to suggest it should also be tailored along pre-existing ideas.

Benson Mambosho is a digital supervisor for Tecno Mobile Tanzania

Why most Kenyans suffer after retirement

Coverage of retirement schemes in Kenya remains below 50%

Majority of Kenyans securing their old age by saving under retirement schemes are still exposed to tough times during sunset years, a survey has revealed.

The study by pension fund administrator Zamara Group has revealed that though pension’s legislation in the country has improved the governance and operations of the retirement funds, it has done little to improve the coverage and adequacy of retirement benefits to individuals.

Coverage of retirement schemes in Kenya has remained relatively low with less than 50 per cent of the formal sector covered and coverage of the much larger informal sector virtually non-existent.

According to Zamara Group CEO Sundeep Raichura, even those who are saving under retirement schemes have insufficient coverage to provide an adequate income when they retire.

The study which covered 65,000 retirement scheme members, spread across more than 200 retirement funds in the country, show that the retirement savings of Kenyans are able to support a replacement of only 34 per cent of their last earnings in retirement.

This falls below the desired target of 75 per cent which would enable individuals to maintain the same standard of living in retirement.

“The findings were quite significant and worrying in that even the few Kenyans lucky enough to belong to a retirement scheme were sleepwalking to disaster and not even aware of it,”   Raichura notes in the 2019 report.

He has since called for urgent intervention by government, regulators, employers and the pension industry to take stock of the situation.

The fund has urged industry players to come up with policy reforms and measures that will improve the outcomes of members of retirement funds.

“Simply put, we need to see more money into retirement savings, get better value out of those savings and have a collective financial literacy drive” he said.

The study also revealed that 93 per cent of Kenyans were opting to access the maximum portion of their retirement savings that they can when changing jobs or leaving employment and this premature encashment of retirement savings was severely impacting their old age saving journey.

“It’s like going on a long distance journey and emptying the fuel tank at every stop” Raichura notes.

The study has  further revealed that the level of contributions for 40 per cent of the retirement schemes in the sample were below the level required to generate a reasonable retirement benefit, and when coupled with the lack of preservation of retirement savings, it means Kenyans are wholly unprepared for retirement.

The study also analysed the options exercised by members of retirement funds when they retire, revealing that 100 per cent of members of provident funds opted to access their benefits as a lump sum and used up the amount within less than three years of retirement.

Members of pension funds also opt to access a third of their pensions as cash.

For those purchasing annuities from their retirement savings, a negligible percentage made a provision for their spouse’s or children and invariably all members opted for non-increasing pensions.

With annual inflation averaging seven per cent, it means the real value or pensions ends up being halved in ten years.

The study shows that most Kenyans do not appreciate the impact of inflation on their savings and pension incomes.

Overall, members of retirement funds involved in study appeared to have a limited understanding of their benefit options and the impact of their decisions on their financial security.  Members are also struggling to identify products that were appropriate to their needs.

On the role of the pension system in the country, Raichura said: “I firmly believe as pension industry, we need to play a bigger role in socio-economical development of our country and  unless we do so, we will have missed a critical opportunity as an industry to address and solve many barriers of the nation’s economical development”.

Last month, the Retirement Benefits Authority (RBA) cautioned pension funds against failure to remit member contributions and file returns in accordance with the law, saying those found culpable will have their licenses revoked.

Chief executive Nzomo Mutuku said the regulator is on the lookout of trustees and administrators who interfere with the role of fund managers, mainly on property investments.

RBA recent data shows the overall retirement benefits assets under management grew by eight per cent from Sh1.080 trillion (US$10.7 billion ) in December 2017 to Sh1.166 trillion (US$11.6 billion ) in June 2018. Assets grew by 21.15 per cent up from Sh963.04 billion (US$9.545billion).

“The growth of the assets can be attributed to improved compliance, gradual recovery in the stock market after the aftermath of the prolong electioneering period in 2017,” RBA notes in its report which covered the year to June 2018.

READ:86% of Kenyans uncertain of financial security in retirement—survey