Jelani Aliyu, Director-General of the National Automotive Design and Development announced that Government is now applying a re-designed loan scheme that allows more Nigerians afford a brand new vehicle.
He said the program was being redesigned in order to include more Nigerian banks. In addition, he hoped after being launched, the loan scheme enabled more people to buy new cars and could the NAIDP provision to discourage the importation of second-hand cars will take effect.
The loan scheme enables more Nigerians to buy new cars
Who will get benefit from the scheme
Local vehicle manufacturers like Innoson are going to derive much benefit from the policy. Moreover, Peugeot, Toyota Nigeria Limited and other owners of assembly factories also will benefit greatly. Besides, the move will also benefit associated services including insurance firms.
Consumer finance is only a half of the matter
Even though the price of the new vehicles would be reduced as the result of the loan scheme, Nigerians currently prefer used vehicles to new ones because of their much more affordable prices. Furthermore, the new car is much more expensive than the old one due to its high tax adding to the too expensive costs of running the business in Nigeria. It would be better if the government could support vehicle assembly firms in the country instead of providing consumer loans.
It would be better if the government could support vehicle assembly firms in the country
instead of providing consumer loans
The Government has been known as an inefficient loan manager. Furthermore, those who receive the loan might not pay back. Previous similar loan scheme achieved mixed success. As used cars are still far cheaper than new ones, there will be major demand for them. Therefore, discouraging its import is going to cause an increase in used car smuggling in Nigeria that would deny the government's revenue.
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