The Nigerian Consumer Credit Corporation (CREDICORP) and the Nigerian Automotive Design and Development Council (NADDC) have signed a partnership agreement to kick off a N20 billion consumer credit fund for locally assembled vehicles.

The new agreement is to help stimulate demand for locally assembled vehicles by providing credit for customers who need the vehicles but do not have the funds.

Director General and Chief Executive Officer of NADDC, Mr. Oluwemimo Joseph Osanipin said the credit scheme is part of the government’s effort to stimulate the economy, noting that there is no better way to stimulate the economy than to provide credit that will boost and increase the demand for auto products.

“This is important because auto products cut across all sectors of the economy, when you promote auto, you are promoting the steel industry, the plastic industry, you are generating a lot of employment and you are promoting the energy sector,” he said.

He said the signing of the agreement was a historic one as it marks a practical step towards turning the economy into a credit economy.

“All over the world, nobody pays cash to buy vehicles,” he said.

“Our people want to buy new vehicles, but it is difficult for one to save enough to buy a new vehicle, so we need a credit system that will help the people because that is done in developed countries.”

He called for the support of the local vehicle assemblers to make the system work effectively by producing high-quality products that people want to buy.

On his part, the Managing Director/CEO of Nigeria Credit Corporation, Engr. Uzoma Nwagba, said the aim of the auto credit scheme is to stimulate demand for Nigerian-made vehicles thereby boosting production, generating employment opportunities and driving sustainable industrial growth within the automobile value chain and enhancing competitiveness in the industry.

He said the job of Credicorp is to make the financing available and easily accessible to enable Nigerians to have cheaper credits.

According to him, “For this particular intervention, we are targeting a single digit interest rate.”

He said to qualify for the scheme, the applicant must have strong credit and show good credit history.

The President of Nigerian Auto Manufacturers Association, Mr. Bawo Omagbitse, while commending the government for initiating the scheme also called for support for the auto industry.

He said the automobile industry in Nigeria needs a major transformation. According to him, “While we are looking to support the demand side, the supply side also needs major support especially in the area of infrastructure development.”

He warned his members that their products must attain a certain level of local content for them to benefit from the credit scheme.

The event was attended by representatives of different auto assembly plants in Nigeria.

The Nigerian Consumer Credit Corporation (CREDICORP) is a government-owned Development Finance Institution (DFI) that aims to increase access to consumer credit for Nigeria’s working population.

It was launched by the present administration early this year with N100 billion take off fund.

One of the primary objectives of CrediCorp is to address the structural barriers, such as limited credit information, difficulty assessing creditworthiness from incomes, and high costs of credit, that hinder consumer credit access in Nigeria.