Since 2020, the federal government, through the National Automotive Design and Development Council (NADDC), has been making efforts to establish a vehicle financing scheme to enable Nigerians to purchase new vehicles.
In 2019, the former Director-General of NADDC, Jelani Aliyu, said the federal government approved the sum of N5 billion to be injected into the Trust Fund in a bid to provide money for soft loans with an interest rate of 6 to 8 percent and a differential of many. multi-year payment plan for Nigerian citizens as a means of developing the country's capacity to purchase new and Nigerian-made vehicles.
Jelani, who spoke at the Trade and Industry Correspondents Association of Nigeria (CICAN) conference in Abuja, revealed that N5 billion was approved for the take-off of the financing scheme to boost local vehicle production in the country .
He said the scheme would go live in early 2020 and “will be available only for Nigerian-made vehicles”. We will also ensure that only those who have stable monthly income access the funds.”
The former CEO explained that it was economically imprudent for a high percentage of the wealth of a nation's citizens “to be dedicated to the purchase of new vehicles. “Cars are liabilities, not assets or investments, so we are looking at how to make people pay less for cars,” he said.
Aliyu noted that providing access to vehicle financing was an important step in supporting the capacity of local manufacturers in the country.
However, five (5) years later, Nigeria does not have a functioning trust fund for vehicle financing, although once again the NADDC promises that the country's vehicle financing scheme will become operational in January 2025.
At a media event in December 2024, the current Director-General of the National Automotive Design and Development Council (NADDC), Joseph Osanipin, announced the start date of Nigeria's vehicle financing scheme, now worth N20 billion. naira.
Speaking while receiving members of the (CICAN) in Abuja, Osanipin said the Scheme will disburse funds through commercial or microfinance banks.
“We need to implement the necessary modalities to make everything smooth. And then when the fund is recovered, they (Scheme) will make sure that the system makes it difficult for people to run away with their money.”
On the interest rate, he said: “Yes, what we are working on today may not be a single-digit interest rate, but very soon it will be back to 9 percent.
“We have been in this case, it is part of what we believe we have to do, provide consumer credit,” he stated.
It may be recalled that in late 2024, the Consumer Credit Corporation of Nigeria (CREDICORP) and the National Automobile Manufacturers Association (NAMA) signed a N20 billion consumer credit fund memorandum of understanding (MoU). for locally assembled cars.
While launching the initiative in Abuja, Osanipin said the event marked a significant step towards Nigeria's transition to a credit-driven economy.
“This initiative is a historic moment for Nigeria. It represents a tangible step toward building a credit-based economy where consumers can access funds to purchase value-driven goods, including cars.
“The N20 billion may seem small, but it is a starting point and we are committed to learning and improving as we go.”
The scheme seeks to provide credit to Nigerians to buy cars without paying cash, provide credit guarantees and encourage local car manufacturers to make vehicles that are not only affordable but meet local demands.
In 2023, the federal government adopted another 10-year National Automotive Industry Development Plan (NAIDP) due to poor performance in implementing the initial 10-year Policy.
Started in 2012, the NAIDP was formed to separate the automotive industry, open doors for investment, increase the capacity of companies to manufacture vehicles locally in Nigeria and also establish a financing scheme to encourage easy purchase of these vehicles by the citizens.