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Pensions may be used to guarantee car loans

By on October 1, 2014

The National Automotive Council has said that plans are being made to enable Nigerians to use their pension contributions as guarantees for car loans.

The Director of Policy and Planning, NAC, Mr. Mahmud Lukman, said this during a press briefing in Lagos over the weekend.

He said, “We are looking at several ways of financing the purchase of vehicles both by private individuals and haulage companies when the auto assemblies begin production in earnest.

“The biggest problem with financing individuals is identity; most Nigerians don’t have national identity cards. So, now, we are looking at the pension scheme.

“Almost every Nigerian worker has a pension scheme and it goes with a PenCom personal identification number. We are going to use the PenCom PIN as an identity because so many people are of no fixed addresses.

“The Pension Act has been reviewed; we want to see if we have leverage on the money that individuals have saved up as pensions to guarantee loans.”

Lukman added that the council would by December take a definite stand on the issue.

Earlier, the Director-General, NAC, Mr. Aminu Jalal, said the country was working with some banks in South Africa to finance the development of Nigeria’s auto assembly industry.

He said the council made the decision to approach the South African banks due to the high interest rate on loans being offered by Nigerian banks.

Jalal said, “All over the world, it is only in Nigeria that you have to pay 100 per cent upfront to buy a car. We have developed a means of financing vehicle purchase both by private individuals and haulage companies.

“We have been discussing with some banks in South Africa; the Memorandum of Understanding is ready. We will soon kick-start operations.”

One of the South African banks, West Bank, is said to have over the years financed the development of several auto industries in Southern Africa. Representatives of the bank are said to have already met with the stakeholders in Nigeria’s auto assembly industry.

Jalal added that the council was working with state governments in the country to get land where auto suppliers could set up operations, adding that it had already received offers from Osun, Delta and Cross River state governments.

He said, “We are working seriously to get land in Lagos, Anambra and Kaduna. Most of these assembly plants have suppliers that follow them to any part of the world where they intend to set up business.

“We are working with these suppliers so that there can be a joint venture to set up their plants. Already, we have contacted the Indian component industry; they were to come in May but didn’t. We are also exploring the possibility of getting Pakistani partners on this.”