The Federal Government has come up with a way to make locally assembled cars affordable for Nigerians.
According to the National Automotive Design and Development Council (NADDC), the government will soon launch a Vehicle Credit Acquisition Scheme.
Making the announcement at an interactive session with journalists in Lagos, Mr Luqman Mamudu, the Director Policy and Planning, NADDC, said the initiative would help people to afford Made-in-Nigeria cars.
Nigeria Today reports that he said the money for the scheme would come from contributions from the council, South Africa and the Central Bank of Nigeria (CBN).
“This is what we have been working on for the past two years. We looked at the available access to asset financing in the country,we found out that the high interest rate is frustrating the purchase of a new vehicle.
This is the gap we want to fill. We are currently working with a company in South Africa which has footprints in 8 African countries where they have developed a commercial and financial model to get recoup their investment.
At NADDC, we are also contributing our own N7.5 billion into the scheme while the South African company will help source for finance from Development Finance Institution (DFI) at single digit interest rate. Our N7.5 billion into the scheme will be interest free.
By the time we put the funds together, it will guarantee an interest rate that is fairly okay. We are in discussion with the Central Bank of Nigeria (CBN) to originate the loans and float it so that it will be attractive for investors to partake in the scheme. Going forward, this will bring down the interest rate. This facility will be given to people that have the capacity to buy cars because we expect that they will have good credit to purchase a car.
If you go to America, over 80 per cent of car purchases are through loans. The credit purchase scheme will assist the operators to help the masses,” he added.
This comes after the Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah, said the government was committed to developing Made-in-Nigeria cars.
According to him, the Federal Government was working hard to achieve results in the local automotive sector.