According to some report I received today, Access Bank and Stanbic IBTC signed a Memorandum with Coscharis Motors to allow customers in Nigeria pay a 10% down payment and spread the rest of their payments for a car over 48 months. The rate is about 16.5 percent which is bonkers to my now fairly Americanized sensibilities but which is quite competitive for Nigeria.
The move itself isn’t new, I think financing has been around in Nigeria for a while, but the issue has been low adoption, which is largely because most people even the nominally employed, don’t have the stable income predictability that makes this a good deal for them. You don’t wanna rope yourself into a 4 year car loan, and then lose your job a year into it. So until we fix the structural problems on the economic side, I really don’t know that this kind of consumer credit schemes will take off, or even that they should.
On the other hand, the aggressiveness with which the three parties seem to be pushing it, and the fact that Coscharis even discounted a bit to keep that rate low means they’re betting really hard on this. So maybe they’re convinced it’s going to make a big dent? Or maybe Coscharis wants to take out the little competition that exists in this area in furtherance of their auto-empire? Like, I get the business case for it, but is there really any room for consumer credit to gain traction in Nigeria?
I don’t know. I will try to keep my eye on this, it’s an interesting area for the country.