FG earmarks N7.5bn for auto mortgage scheme

The Federal Government, through the National Automotive Design and Development Council, has announced plans to launch a N7.5bn credit purchase scheme to give opportunities to Nigerians to purchase locally assembled vehicles.

The Director, Policy and Planning, NADDC, Mr. Luqman Mamudu, said on Tuesday that the council would contribute the amount ( N7.5bn) at a low interest rate, with counterpart funding from a company in South Africa, to help Nigerians have access to affordable new vehicles.

Speaking during a press briefing in Lagos, Mamudu said, “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 and 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 eight African countries, where they have developed a commercial and financial model to recoup their investment

“At NADDC, we are also contributing our own N7.5bn into the scheme while the South African company will help source for finance from Development Finance Institution (DFI) at a single digit interest rate.”

He said that when the funds are put together, it would guarantee an interest rate at which it would be easy for people to purchase vehicles at between eight and 10 per cent.

“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 to originate the loans and float it so that it will be attractive for investors to partake in the scheme. Going forward, this will further 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 done through loans. The credit purchase scheme will assist the operators to help the masses,” he added.

He added that the council was planning to build capacities in a local assembly to attract component manufacturers to set up their factories in Nigeria.

“We are building three laboratories, costing about N3bn in Lagos, Kaduna and Enugu. The one in Lagos is an emission testing laboratory to test for the level of emission. We are almost 90 per cent complete. We also have a component part manufacturing testing laboratory in Enugu. We are doing all these to prepare for the next stage of component development because this is where job opportunities are enormous, but the entire process requires patience on the side of the government and investors,” he said.