United Bank for Africa (UBA) Plc is collaborating with Mikano Motors to launch a new vehicle financing scheme that will enable Nigerians acquire brand new vehicles with an initial deposit of 30 percent, while the bank will finance the remaining 70 percent.
The initiative tagged, “Drive Your Dream Today” was unveiled on Monday at the Mikano Motors showroom, Victoria Island, Lagos as the two companies want to make vehicle ownership more accessible thru structured consumer credit.
Under the arrangement, eligible customers will pay 30 per cent of the cost of their vehicle of choice, while UBA will finance the balance. The loan is to be repaid over a period of 36 months at an interest rate of 23 per cent.
The scheme is targeted at both the salaried and self employed Nigerians. UBA also said individuals without a fixed monthly income can participate, on meeting the bank’s eligibility conditions.
The initiative is expected to provide an alternative for prospective vehicle buyers who might not be able to afford the entire cost of a new vehicle upfront, while allowing them to pay off the cost over a period of three years.
“The partnership was born out of the need to make vehicle ownership more accessible to hardworking Nigerians,” said UBA’s Group Executive Director-designate, Personal and Business Banking, Chidi Okpala.
“ Owning a car should be within the reach of hardworking Nigerians, and this partnership makes it far more achievable,” Okpala said.
Read Also: Indonesia Deploys Aircraft to Battle Worsening Forest Fires
Customers will only pay 30 per cent of the vehicle’s value, while UBA will finance the remaining 70 per cent to be repaid over three years, he said.
Okpala said the initiative was part of the bank’s broader effort to deepen access to credit and encourage Nigerians to embrace responsible borrowing as a way of solving major financial needs.
UBA’s Group Head, Consumer Lending, Frank Okoh explained that the financing process has been deliberately simplified for customers with varying income profiles.
“We have made entry simple and the terms clear whether you are on a salary or running your own business,” said Okoh.
He said prospective customers would first undergo an eligibility check which could be done at any UBA branch or thru email.
After the customer is approved, the applicant can obtain a proforma invoice from Mikano Motors for the vehicle of his choice and continue with the financing process.
The extension of the scheme to cater for self-employed customers and Nigerians without a regular monthly salary increases the potential reach of the scheme especially for Nigerians who have an income pattern that does not fit the conventional monthly salary structure that some of the lending arrangements require
Mikano Motors said the partnership with UBA is expected to improve access to the range of its vehicles and also enable customers to enjoy the company’s after-sales support.
“The goal of Mikano Motors is not to sell vehicles but to give our customers a complete ownership experience,” said Tarek Mostafa, general manager, Mikano Motors.
Mostafa said: “Mikano Motors was established to offer Nigerians a high-end ownership experience from the showroom to years down the road.
He said the company’s after sales services include providing genuine spare parts, maintenance and servicing support throughout the country.
Mostafa stated that the partnership with UBA would give more Nigerians access to Mikano vehicles and the support services that accompany ownership.
“Partnering with UBA allows more customers to experience that, and we are proud to build deep relationships with a bank that shares our commitment to service,” he added.
The vehicle financing scheme is in line with UBA’s drive to expand consumer lending and develop financial products that enable people to meet big-ticket purchase needs without paying the full amount upfront, the bank said.
The deal comes amid rising interest in vehicle finance as consumers and companies look for ways to cope with the rising cost of new cars.
The Drive Your Dream Today scheme allows eligible customers to own a brand new Mikano Motors vehicle thru a structured repayment plan that combines a 30 percent down payment with bank financing for the remaining 70 percent.
According to the bank, interested customers can start the process by checking their eligibility with UBA, before selecting their desired vehicle and getting the required proforma invoice from Mikano Motors.