Nigerians’ll soon access single-digit interest car loans, says FG

The Federal Government has opened talks with three banks in
Nigeria to facilitate the establishment of single-digit interest
loans for buyers of new vehicles being assembled in Nigeria.

The Director-General, National Automotive Design and Development
Council, Mr Jelani Aliyu, stated this in Lagos while speaking with
journalists on the sidelines of the launch of a 2019
Nigeria-assembled Honda HR-V.

He gave the names of the banks as Wema Bank, Jaiz Bank and
Stanbic IBTC Bank, adding that discussions were already at an
advanced stage.

Jelani stated, “We are at the stage of finalising the agreement
in terms of the MOA– Memorandum of Agreement” adding that the deal
would finalised by the end of the current quarter.

He said, “The objective is to provide single-digit interest
loans. Auto financing has been difficult in the country because
banks charge 20 per cent interest or more. We are working with
these banks to bring it down to about between nine and 10 per cent
maximum.

“With about 10 per cent, people can drive new vehicles and we
hope to get it working before the end of this second quarter. This
will also to increase capacity in terms of new vehicle
production.”

The NADDC DG said auto manufacturers would need to meet certain
conditions to be part of the deal such as only vehicles assembled
in Nigeria could be sold under the arrangement; provision of
after-sale network and spare parts among others.

“This is just a pilot scheme to get it going. Once the auto
finance deal gets off the ground, we hope that more banks will get
into it and the Nigerian government would put more funds into it,”
Jelani said.

Since the government increased the import duty on vehicles from
22 per cent to 70 per cent about four years ago, prices of
automobiles have risen astronomically.

This has adversely affected the number of vehicles being sold
annually in Nigeria, with the figure of new vehicles dropping from
about 50,000 units in 2012 to 18,000 units in 2014 and less than
10,000 in 2018.

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