FG partners banks for single digit car financing loans

The Federal Government is about concluding arrangements with three commercial banks in the country for establishment of a single digit interest loans for buyers of new cars.

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

Jelani gave the names of the banks as Wema Bank, Jaiz Bank and Stanbic IBTC Bank.

Jelani stated: “We are at the stage of finalising the agreement in terms of the MOA– Memorandum of Agreement.

The NADDC boss, who assured that the deal would be finalised by the end of the current quarter, said further: “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.

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“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.”

According to Jelani, 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.

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