The federal government has announced it plans to secure a car loan deal with some banks in the country. The move will allow Nigerians to buy locally assembled vehicles via a minimal interest loan program.
Announcing the development, the Director-General of National Automotive Design and Development Council, Mr. Jelani ALiyu, explained that banks such as Wema, Jaiz, and Stanbic IBTC have already been contacted and a conclusion would soon be reached about the availability of the loan.
The DG, who was present at the launch of a Honda HR-V in Lagos, said, “We are at the stage of finalising the agreement in terms of the MOA– Memorandum of Agreement” adding that the deal would be finalised by the end of the current quarter.
“The objective is to provide single-digit interest loans. Auto financing has been difficult in the country because banks charge 20 percent interest or more. We are working with these banks to bring it down to about between nine and 10 percent maximum.
“With about 10 percent, 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.”
Jelani further iterated that to be beneficiaries of the loan arrangement, there would be some terms and conditions for interested car manufacturers, adding that sales of spare parts of the locally assembled cars would come as part of the agreement.
On why the government is discussing with only three banks, the DG stated, “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.”
The 72 percent Increment in import duties for cars in 2015 has spiked up prices of cars in Nigeria, while dealers have been experiencing low rates of car sales as well.
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