Africa’s largest bank by market value, FirstRand, is to offer vehicle finance in Nigeria as the Johannesburg-based lender targets growth in the continent’s biggest economy.
Bloomberg reports:
FirstRand’s WesBank has signed a memorandum of understanding with Nigeria’s National Automotive Council to serve retail and business customers in Africa’s most-populous nation, the vehicle-financing unit said in a statement today. The agreement aims to to stimulate the sale of locally assembled autos in Nigeria, it said.
“We are delighted that the Nigerian government and NAC have chosen WesBank as their partner of choice,” Chief Executive Officer Chris de Kock said in the statement. “In due time this venture could become the biggest market for WesBank in sub-Saharan Africa outside of South Africa.”
Wesbank’s entry into the Nigerian vehicle-financing market expands FirstRand’s footprint in the nation of more than 170 million people. Investment banking unit Rand Merchant Bank started operations there in late 2012, while FNB Commercial targets lending to smaller businesses.
At least 22 vehicle companies are discussing setting up operations in Nigeria, bolstered by its year-old auto policy, Trade and Investment Minister Olusegun Aganga said in an interview in New York last month.
Nigeria’s auto policy increased duties on imported vehicles to boost domestic manufacturing, which represents less than 10 percent of gross domestic product, according to the country’s National Bureau of Statistics.
Carlos Ghosn, CEO of Nissan Motor Co. (7201), which started assembling cars in Nigeria this year, said in January demand in the country is as high as 3 million cars a year.