Nakumatt will from next year offer high-value goods on credit as it seeks to ramp up sales of products like furniture and electronics. The retail chain says buyers on the hire purchase terms will be given a year to pay, which will attract an annual interest rate of 24 per cent. “We will launch the hire purchase system, especially for high value electronics and furniture. Customers will be allowed to pay for the goods in a maximum of 12 monthly instalments,” said Atul Shah, Nakumatt Holdings managing director. “We have already sought regulatory approval to start offering forex services in the country even as we mull over offering insurance products,” added Mr Shah. The entry of Nakumatt into the hire purchase business will put it in a head-to-head battle with players such Kenya Credit Traders, Kukopesha and African Retail Traders that have for years offered workers household items on credit. The retailer’s pursuit of credit deals comes when the hire purchase segment has been subdued due to increased access to cheaper bank loans. The average lending rates currently stands at about 18 per cent, which is lower compared to Nakumatt’s targeted interest rate of 24 per cent. Nakumatt will target workers with a regular monthly income and firms like hotels and SMEs looking to buy furniture and premium electronics like high-definition TV sets — some retailing at more than Sh1 million. Africa, including Kenya, is faced with a growing well-off middle class that has the spending power for luxury items. This has prompted electronic firms like Samsung to unveil high-end TV sets including the 84-inch set retailing at Sh3.5 million as they race to profit from the growing African middle class and its disposable income. Nakumatt stated in July that its sales for the year to February was more than Sh56.5 billion and that it was targeting sales of Sh65.2 billion for the current financial year. The sales figures make it the largest retailer followed by Tuskys and Uchumi, which reported Sh25.2 billion and Sh15 billion respectively in revenues last year. The chain, which targets middle- and upper-income customers, plans to step up its expansion after the destruction of one of its flagship stores housed at the Westgate Shopping Mall that was attacked by terrorists last month. It opened its sixth store in Uganda Thursday and plans to open two more in Kenya and three in Uganda by February next year. It has 41 branches in East Africa and hopes to open outlets in Djibouti, South Sudan and Burundi.
Posted on: Fri, 25 Oct 2013 07:37:23 +0000
Trending Topics
Recently Viewed Topics
© 2015