SMEDAN, Elizade JAC Motors Plan Truck Financing Scheme For SMEs

Small and medium-sized enterprises (SMEs) may have access to financing to acquire light-duty trucks under an initiative being developed by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and Elizade JAC Motors.

The initiative aims to address transportation costs faced by SMEs, particularly businesses that rely on hired vehicles or ageing second-hand trucks to move goods and provide services.

Under the arrangement, SMEs would be able to access trucks with capacities ranging from 1.6 tonnes to 10 tonnes, with available power options including petrol, diesel, hybrid and compressed natural gas (CNG).

Speaking at an engagement in Lagos, Chief Operating Officer of JAC Motors, Arvind Bhardwaj, said the initiative was conceived to address the recurring transportation expenses incurred by small businesses and support a shift from reliance on third-party transporters to ownership of logistics assets.

Bhardwaj said the company’s assessment of the total cost of ownership indicated that the initial lower cost of acquiring used trucks could be offset by higher expenditure on maintenance and repairs over time.

He said the assessment showed that an SME could spend about N8.7 million more over five years on a used vehicle than on a new truck when maintenance, repairs, tyres, batteries and other associated costs were taken into account.

Also speaking, Senior Brand Manager of JAC Motors, Olumide Olaokun, said the company’s 1.6-tonne truck is available in petrol and hybrid CNG variants, while its 3-tonne, 5-tonne and 10-tonne models are diesel-powered.

Olaokun said the hybrid CNG variant could cover about 120 kilometres on a tank, noting that its operating economics would depend largely on the availability of CNG infrastructure and the cost of the alternative fuel.

Under the proposed financing structure, customers would provide an initial contribution and finance the balance through participating banks. One financing illustration presented at the engagement involved a 20 per cent initial contribution, an annual interest rate of 25 per cent and a four-year repayment period.

Meanwhile, under the illustration, the monthly repayment for the 1.6-tonne truck was projected at less than N800,000. Another option allows prospective buyers to pay 10 per cent to reserve a vehicle while financing for the balance is processed by the bank.

Similarly, Zonal Coordinator, South-West Zonal Office of SMEDAN, Olukayode Shode, said access to productive assets remained an important consideration in efforts to strengthen the capacity of SMEs.

“The initiative aligns with the government’s broader SME development agenda, particularly improving access to finance and productive assets. For many small businesses, transportation is a high operating cost, and solutions that enable SMEs to own productive assets can help reduce operating constraints, improve productivity and support sustainable business growth,” Shode said.