Star Rentals Banks on Innovation and Excellent Customer Service to Thrive

    In the majority of African countries, high interest rates and prohibitive collateral requirements prevent most businesses from securing the necessary credit to acquire expensive machinery, equipment or vehicles. Traditional banking and commercial credit are, therefore, often only available to the top end of the market.

    “The acquisition of assets-particularly expensive capital equipment-is a major commitment for many businesses. How that acquisition is funded requires careful planning,” says Oscar Saina, the general manager at Star Rentals.

    He opines that rather than pay for the asset outright using cash, it always make sense for businesses to look for ways of spreading the cost of acquiring an asset, to coincide with the timing of the revenue generated by the business. Thus the most common sources of medium term finance for investment in capital assets are asset-leasing or asset-finance.

    IFC defines leasing as an alternative method of payment for the use of equipment such a vehicle, machinery or any manufactured instrument over a specified period of time.

    “In its simplest form, leasing is particularly useful as a financial instrument for businesses in Kenya because it reduces the initial capital requirements for acquiring equipment,” notes the executive.

    The idea to start Star Rentals was initiated in 2014 and finalized in 2016 when the company officially begun its operations. The firm is part of the larger logistics heavyweight, Siginon Group.

    Oscar Saina, the general manager at Star Rentals

    At the outset, we foresaw huge opportunities in the industry, says Saina. “The cost of acquisition of assets for businesses was overwhelming. The government had also capped the interest rates which locked out many small players from traditional forms of financing. So, most of them opted for asset leasing.”

    At the same time, the Government of Kenya adopted leasing as the framework to provide access to a largely increased number of well-maintained and utilized vehicles. This stemmed from the hindsight that public service transport system had generally been inadequate to meet GoK service delivery requirements due to the age, condition and poor utilization of government vehicles.

    “So the pie was basically large enough for any player,” notes the GM.

    Initially established as an independent asset leasing firm, Star Rentals understood the success of its customer’s businesses would not be judged by solely on their bottom line, but on a complex myriad of factors, including their underlying capital assets.

    “As such, we partner with our customers to visualize their objectives, thereby making it easier for them to acquire used or new equipments that can help their businesses grow,” offers Mr. Saina.

    “We are flexible and deliver solutions with a difference.”

    Since then, Star Rentals has set itself apart by blending innovative leasing products and services with excellent customer service. This has contributed to consistent growth and enabled further portfolio diversification as client’s need changes.

    “As a startup, we had no track record. So we narrowed our focus to corporate players who understood leasing and its implications in the world of business. It was an uphill task to focus on clients who did not understand the leasing concept,” he reveals.

    From the initial vehicles and machinery leasing products, the firm has now expanded its portfolio to now include office and ICT equipment, construction and mining equipment, medical and security equipment, agricultural equipment and airport ground handling, and many more.

    Over the years, the firm has assumed its place at the pinnacle of the competitive leasing industry in East Africa. Its success in the industry is punctuated by massive projects it has successfully executed across the country, serving some of the largest corporate customers in public and private sectors.

    Going by the accolades and awards the company won recently, there is no escaping the fact that Star Rentals is set to revolutionize the leasing sector.

    It has also made a name as one of the fastest growing startup in its line of business. “We have grown from an asset of zero to Kshs 250 million in just under two years,” says Saina.

    So, what makes Star Rentals to stand out?

    “We have the quickest turn around period in the market. We focus on clients and make sure their needs are addressed accordingly. We also enjoy bigger support from our parent company-Siginon Group, and an internal insurance agency that handles all insurance needs for the leased assets.

    Looking at its tremendous growth, it is easy to see why quality services and great customer experience have been at the heart of this company. These core values are inextricably linked to the company’s culture which becomes clear when you meet the firm’s staff at its headquarters at Siginon Aviation Complex within JKIA.

    A well equipped and trained staff serves clients better, says Saina. “We have over the years improved the working condition of our team to enhance their capability and productivity.”

    As a leader of his team, Saina is responsible for the overall performance of the firm to make sure it achieves its mandates and objectives to shareholders, clients and the public.

    Despite its successes in the industry, Saina notes that it has its fair share of challenges.

    “Handling client expectation is one of the biggest yet. A customer has to demonstrate that he has capability to pay for the leased assets. In asset financing chain, we are the last resort. So when a client gets rejected by a bank and they turn to us, they come with an equally challenging risk that we have to mitigate,” explains the executive.

    Because the industry is dynamic, the most successful leasing firm keeps a close eye on trends in the sector. To stay ahead, Star Rentals reads trends and adapt consequently.

    “We are very innovative and try to align ourselves with ever emerging opportunities. GoK adopted leasing which was a big boost. When the government takes a front seat, it creates confidence in the industry. This opened new opportunities within parastatals and we responded accordingly with relevant products.”

    The firm now looks forward to tap on emerging opportunities in the aircraft industry.

    Although the leasing concept is still new to the larger public, Saina argues that we need to address the ownership culture. “Buying and maintaining an asset is expensive. And as soon as you invest in a piece of a gadget or machinery, it is only a matter of time before a new version comes out, making yours obsolete or inferior. Leasing offers advantages that owning does not, including lower monthly payments, which are typically spread out over the course of months or years rather than delivered in a lump sum.”

    Due to the high costs involved in owning and operating equipment, many individuals, small business owners and large businesses opt to lease rather than own, he advises.

    Although Star Rentals has just cemented its foot in the industry, it seems like its journey has just begun. The firm will continue being a trusted advisor and service provider for its customers and looks to an even brighter future.