Auto loan market drives sales in Africa
Leading car loan services platform Autochek Africa has announced the launch of a dedicated new car section on its website and mobile app, enabling customers in East and West Africa to access a variety of digital financing options to purchase new cars and trucks from reputable manufacturers. .
The offer will offer repayment terms of up to 60 months and attractive interest rates from leading regional players, such as Ecobank and Kenyan bank NCBA, with funding of up to 90%, the company announced in a press release on Wednesday, December 8.
Commenting on the launch, Timi Tope Ologunoye, COO of Autochek Africa, said: “We are delighted to partner with financiers and the automotive industry to provide this facility. It is in response to customer feedback to democratize the purchase of new cars through attractive and affordable financing options. “
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Ologunoye added that financing new cars and opening a new frontier in automotive FinTech is part of the company’s vision to solidify its position as the leading car lending platform in the African region.
Despite a pandemic-induced drop in overall new car sales due to production restrictions, sales volumes are starting to increase with the resumption of economic activities. And according to research published in the press release, the size of the African automotive market, currently valued at $ 90 billion in 2020, is expected to increase by 30%, mainly due to an increase in financing penetration to 10% year on year. .
Launched in October 2020, the automotive technology company offers financing options from more than 70 banks across the continent. Loan applications are processed within 24 hours, with terms including an interest rate of 15% for loans repayable over a period of four to five years.
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And so far, the data shows that its business is gaining ground. Since its launch, the startup has processed more than 46,000 loan applications in its five markets in West and East Africa – Nigeria, Ghana, Kenya, Ivory Coast, Kenya and Uganda – with more than 1,000 dealers in the Autochek network and more than 15,000 certified and fundable vehicles on the Autochek marketplace.
In a recent interview with PYMNTS, the CEO of Autochek Africa Etop Ikpe explained how the auto company makes financing easier for its consumers by sending a single request to all banks in their system, along with consumer information and underwriting analysis on the cost of the vehicle.
“With traditional loan application systems, you apply and select the bank you want to go to. [But] in our case you make a request, and it goes to all the banks and they have the option of making an offer to you, ”Ikpe said, adding that at the end of the day one request can earn up to 10-15. different offers within 30 minutes to 24 hours.
In October, the Lagos-based company announced it had secured $ 13.1 million in seed funding, less than a year after raising $ 3.4 million in pre-seed funding in November 2020.
The company has earmarked the investment to deepen its presence in West Africa and expand its presence in East Africa, following its recent acquisition of Cheki Kenya and Cheki Uganda, the leading online automotive marketplace of East Africa.
The company also plans to take advantage of the extensive retail network of Japanese Toyota Tsusho – the company’s subsidiary, Mobility 54, is one of Autochek’s investors – in 46 African countries to deepen its expansion in the region.
Now, with its brand new automotive portfolio, the company aims to launch over 300 new cars listed in all markets by the end of the year, while adding more carrier partners to the Autochek platform.