Tier two bank Stanbic Ibtc and KIA motors have announced a partnership on a vehicle finance scheme. Under the scheme, customers of the bank will be able to buy certain models at a discounted rate.
- The scheme covers three KIA models: KIA Soul, KIA Picanto, and KIA Rio.
- Stanbic Ibtc customers get a 10% discount on the price of the cars and a discount on insurance premium.
- Customers have to put up equity contribution of between 10-30%.
- Repayment tenure for the loan is up to 60 months.
- Interest rates on the loan are competitive.
How KIA Motors benefits
The loan scheme enables the company to sell more cars as payment is staggered. Partnering with a bank ensures that the company will get paid upfront by the bank, thus eliminating any form of default. The massive depreciation of the Naira against the dollar in 2016 has pushed the cost of brand new cars beyond the reach of the average Nigerian, with brand new cars going for as high as N12 million.
Stanbic Ibtc also gains
For Stanbic Ibtc, the partnership gives it an opportunity to expand its loan book. Even though the bank has not stated it, interest rates will be higher than rates on treasury bills which are currently in the 18% range. The 10% discount on the cars will be a big draw to customers of the bank.
KIA Motors Nigeria was established in 2002. The cars are solely distributed in Nigeria by Dana Motors, a subsidiary of the Dana Group. Ibtc Chartered bank was founded in 1989 by Atedo Peterside. The bank merged with Standard Bank Nigeria Limited and became Stanbic Ibtc on September 20, 2007 and became known as Stanbic Ibtc.