Lagos: Stakeholders in Nigeria’s automotive sector have called for affordable vehicle financing tailored to Nigerians’ cash-flow patterns to support domestic production, ease mobility costs, and make vehicles more accessible as productive assets. They made the call at the Lagos Chamber of Commerce and Industry (LCCI) Automobile and Allied Services Group Symposium on Thursday in Lagos.
According to News Agency of Nigeria, the symposium, themed ‘From Subsidy to Credit: Can Vehicle Financing Replace Fuel Subsidy As Nigeria’s Mobility Equaliser?’, featured several industry experts who emphasized the urgent need for vehicle financing solutions following the removal of fuel subsidies in May 2023. Dr. Femi Eguaikhide, Chairman of the Auto and Allied Sectorial Group at LCCI, highlighted that vehicles are not only a means of transportation but serve as workplaces and income-generating assets for many Nigerians.
Eguaikhide argued that vehicle financing could replace the role of fuel subsidies in reducing mobility costs, provided loans are affordable and structured around the income patterns of Nigerians. He noted that less than five per cent of vehicles in Nigeria are financed, presenting both a challenge and an opportunity to equalize vehicle ownership through credit.
He proposed single-digit interest rates, longer repayment periods, and lease-to-own arrangements, especially for commercial transport operators and informal-sector users. Eguaikhide suggested using alternative data like telematics, GPS tracking, and cash-flow records to assess borrowers without traditional credit histories, enabling finance for productivity rather than just relying on conventional collateral.
Mr. Leye Kupoluyi, President of LCCI, represented by Mr. Opeyemi Aminu, Vice President, pointed out that the removal of fuel subsidies has fundamentally altered the economics of mobility. He stressed the importance of shifting from consumption subsidy to productive asset financing to support mobility. Kupoluyi warned that high interest rates, short loan tenors, and excessive vehicle prices could hinder the effectiveness of vehicle financing.
Kupoluyi proposed a National Vehicle Financing and Mobility Credit Framework with clear targets for access, affordability, and responsible lending. He also suggested a Vehicle Finance Guarantee or Risk-Sharing Facility to reduce lender risk and facilitate longer repayment periods, alongside specialized financing windows for commercial vehicles and income-generating assets.
Chief Anselm Ilekuba, Chairman of the Association of Local Content Manufacturers Association of Nigeria (ALCMAN), emphasized the industrialization potential of vehicle financing if it prioritizes Nigerian-made vehicles. Represented by Mmesoma Ilekuba, he called for a financing architecture aligned with the realities of the Nigerian automotive industry and supported the establishment of a National Automotive Bank to bolster the entire automotive value chain.
Mr. Joseph Osanipin, Director-General of the National Automotive Design and Development Council (NADDC), stressed that vehicle financing should be affordable, accessible, and sustainable, supporting both Nigerian-made vehicles and local manufacturing. Represented by Mr. Timothy Tanko, Osanipin advocated for collaborative efforts between government, financial institutions, and manufacturers to develop innovative financing models that can drive mobility, economic inclusion, and industrial development.