After years of promises, the federal government's vehicle financing project is finally set to kick off operations in January 2025. The Director General of the National Automotive Design and Development Council (NADDC), Joseph Osanipin, made this known at a recent media event.
Osanipin noted that N20 billion has been injected into the Nigerian Vehicle Financing Scheme in preparation for takeoff, and it will be disbursed via commercial and microfinance banks.
Once the scheme commences, Nigerians will be able to purchase brand-new vehicles and make repayments over a defined period.
The scheme was conceptualized to support local car manufacturers, thus, the financing options would focus only on made-in-Nigeria cars. According to Jelani Aliyu, former Director of NADCC, it would also be structured so that Nigerians with stable monthly income can access it and get cars without using up their wealth.
According to TRIBUNE reports, the current DG, Joseph Osanipin, added at the recent media briefing in Abuja that modalities will be put in place to ensure prompt and consistent repayment from beneficiaries.
While the scheme will not work with single-digit interest rates as earlier anticipated, Osanipin assured that efforts are underway to bring the rates down overtime to 9%.
The plans to start vehicle financing in Nigeria received some boost when the Nigerian Consumer Credit Corporation (CREDICORP) and National Automotive Manufacturers Association (NAMA) signed a N20 billion memorandum of understanding (MoU) consumer credit fund for locally-assembled automobiles.
Osanipin said during the event that it marked a major milestone in moving Nigeria into a credit-driven economy. He added that the N20 billion is a start, and the scheme will improve in funding and operations over time.
TRIBUNE reports that the federal government began efforts to establish a Vehicle Financing Scheme in collaboration with the National Automotive Design and Development Council (NADDC) in 2020.
The target was to provide soft loans for Nigerians to purchase brand-new vehicles at affordable interest ranging from 6 to 8%, with repayment spread over many years.
This would also boost local production. According to Jelani Aliyu, former director of NADCC, the government also approved N5 billion for the Trust Fund in 2019.
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