NADDC Moves To Expand Funding For Vehicle Financing Scheme

National Automotive Design and Development Council (NADDC) is seeking the involvement of the Central Bank of Nigeria (CBN) and commercial banks in the funding of the country’s vehicle financing scheme as a means to encourage the use of new vehicles while driving a decline in the desire for pre-owned vehicles in Nigeria.

Speaking to Nigerian Tribune, the Director General of NADDC, Otunba Joseph Osanipin, said it was important for the country to access funding for the purchase of new vehicles.

Osanipin explained that for the automotive industry in Nigeria to grow as expected, there must be a platform that citizens can access to enable them to afford new vehicles.

The Nigerian Consumer Credit Corporation (CrediCorp) is implementing a ₦20 billion fund in partnership with NADDC, aimed at enabling Nigerians to purchase locally-assembled vehicles at single-digit interest rates. The program focuses on reducing reliance on used cars (“Tokunbo”) by offering accessible credit for new vehicles.

NADDC Boss noted that the N20 billion is not enough to adequately fund the vehicle financing scheme, seeking a partnership with CBN and commercial banks.

He said the “fund needed for this sector is huge. So CrediCorp may not be able to do it alone. We need commercial Bank, they need to a play role. CBN can come with intervention fund to aid the sector”.

Speaking further, the NADDC DG stated that one reason why vehicles are expensive in Nigeria is because of the component parts, “that is why we are working tirelessly to ensure we develop local components, if we are going to rely on bringing in all the components, it will be expensive.

“We are working with component manufacturers so that they can produce more of this components in Nigeria. Some of these parts come with duty and it influence or affect the final price of the vehicle”.

He explained that if one can compare the price, it is favorable for the used vehicles, “their prices are very low, and some of them, because they are not good, the prices are like giving way, but we don’t know what we are buying because we don’t have any test results to show the condition of those vehicles.

“That is part of the reason why we are doing this. We are doing it in order to grow the industry and encourage more production of this new vehicles in Nigeria, because by the time you can’t bring in these bad vehicles, then you will not be able to deceive the customer, the buyer, because it is when you bring in the bad vehicles, those one that are already end of life, you can now sell it in pretense as if you are selling a good vehicle, by so doing, affecting the sells of the new vehicles they are producing in Nigeria.

“And apart from encouraging production, we take policy that will discourage inflows of substandard vehicles, and again, the government is supporting the demand, stimulating demand through provision of customer credit to finance acquisition of new vehicles,” he stated.