Tinubu Kicks Off Scheme to Help Nigerians With Car Purchases With N20 Billion
- After more than five years since the first move was made, Nigeria's vehicle financing scheme is finally set to take off
- According to the DG of NADDC, operations will start in January 2025, and N20 billion has been provided for the takeoff
- The scheme will provide qualified Nigerians with low-interest credit facilities to buy brand-new cars and pay over a period
Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.
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.
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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.
Only Made-in-Nigeria vehicles
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.
Efforts for vehicle financing started in 2019
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.
Billed to commence in 2020, Jelani noted that the scheme was to help people pay less for cars, by spreading the financial burden over a longer period.
Education financing with NELFUND
In related news, Legit.ng reported that the Federal government's student loans under the Nigerian Education Loan Fund (NELFUND) had reached 94,000 students in 2024.
The NELFUND Managing Director stated that President Bola Tinubu's administration had already released about N130 billion to the scheme.
The MD added that the scheme is targeting 1.2 million students in 2025, and aims to reach more university students in southern Nigeria.
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Source: Legit.ng
