The Nigerian Consumer Credit Corporation (CREDICORP) and National Automotive Manufacturers Association (NAMA) on Thursday signed a N20 billion memorandum of understanding (MoU) for a consumer credit fund for locally-assembled automobiles.
The scheme seeks to provide credit for Nigerians to buy cars without paying cash, provide credit guarantees and nudge locàl automobile manufacturers to make vehicles not only affordable but meet local demands.
At the MoU signing ceremony in Abuja on Thursday were representatives of local automakers like Nord, Peugeot Automobile of Nigeria (PAN), Milan, TVS and Jet, among others.
In his remarks, the Director General of National Automotive Design and Development Council (NADDC), Oluwemimo Joseph Osinipin stated that history was being made with the kick-off of the N20 billion consumer credit fund for locally-assembled automobiles.
According to him, steps were being taken to turn the country into a credit economy, adding that Nigerians were looking forward to buying vehicles without instant payment of cash with the initiative by Creditcorp.
The credit scheme by Creditcorp, he stated, follows the trend in other parts of the world where vehicle owners use credit facilities to acquire and pay for vehicles in instalments.
Osonipin noted that no country can develop without the credit system working while soliciting for support for Creditcorp.
He argued that the success of the credit scheme was dependent on the support the automakers will extend to Creditcorp, urging them to align their processes with those of the latter.
The Managing Director, Creditcorp, Uzoma Nwagwa noted that focus should be on the initial size of the credit scheme (N20 billion), but on what it sets out to achieve over time.
According to him, Creditcorp’s target was to help car owners secure credit at single-digit, stressing that the credit history of individuals with financial institutions was necessary.
He also disclosed that his organisation would also provide credit guarantees to the local automakers up to a certain percentage to mitigate their losses, if any.
Nwagwa explained that while it builds the necessary infrastructure to grow the credit scheme, automakers have the responsibility of ensuring demand for their vehicles.
The Nigerian Consumer Credit Corporation (CREDICORP) is a Development Finance Institution (DFI) of the Federal Government of Nigeria, established with the mandate: to democratise access to consumer credit for Nigeria’s working population.
Ndubuisi Francis
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