The House of Representatives Committee on Industry has resolved to pursue legislation aimed at establishing single-digit interest rates to facilitate the purchase of new cars, tricycles, and motorcycles for more Nigerians through affordable credit schemes.
This decision came after an oversight visit on Tuesday to automobile, tricycle, and motorcycle assembly plants in Lagos, in collaboration with the National Automotive Design and Development Council (NADDC).
The committee, led by its Chairman, Dr Enitan Dolapo-Badru, toured the facilities of Dag Industries Nigeria Ltd., Simba TVC, and CIG Motors as part of its nationwide inspection of local manufacturers.
The lawmakers highlighted the necessity for enhanced participation from banks in the Federal Government’s credit financing initiatives to reduce the importation of used vehicles and promote a cleaner environment.
They also underscored the importance of developing local content, producing spare parts, and providing affordable financing options for citizens.
“Currently, when a price is placed on a car, can the average person afford it? Even a director on grade level 17 cannot simply walk in and purchase a car,” Dolapo-Badru told reporters during the visit.
He lamented that commercial banks are presently offering vehicle loans at double-digit interest rates ranging from 24 to 38 per cent, characterising this situation as “unsustainable and counterproductive.”
“We need to revisit this with the Central Bank, regulators, and assemblers so that Nigerians can buy new cars instead of importing dilapidated vehicles,” he added.
The committee has committed to collaborating with financial institutions and industry regulators to ensure affordable credit facilities and price regulation within the automobile sector.
Dolapo-Badru praised the NADDC, the Standards Organisation of Nigeria (SON), and the Manufacturers Association of Nigeria (MAN) for their contributions to supporting industrial growth and promoting local vehicle production.
Mr Joseph Osanipin, Director-General of NADDC, called for stronger collaboration from banks and private investors to sustain the government’s ongoing consumer credit initiatives.
He noted that the N20 billion intervention fund established under the CREDICORP scheme serves merely as seed capital and is insufficient to meet the sector’s demands.
“N20 billion cannot cover everything. No government can solely finance the automobile industry. Globally, financial institutions are responsible for driving auto financing, often covering up to 90 per cent of the cost,” Osanipin explained.
He further elaborated that under a new initiative from NADDC, Nigerians would be able to make an initial five per cent down payment to assemblers and take delivery of vehicles while settling the balance through a credit guarantee arrangement. (NAN)
