Islamic lender Gulf African Bank (GAB) has inked a deal with TransAfrica Motors to finance customers buying Chinese First Automotive Works (FAW) trucks from the motor dealer.
Gulf African Bank head of business, Saada Mohamed said the agreement would see customers – Muslim and non-Muslims – access up to 80 percent financing for up to four years.
“At GAB, one of our aims is to ease the financial load of our existing and potential customers in the current business environment through such partnerships,” said Ms Mohamed.
The lender will charge customers 14.25 percent interest on the loans on a reducing balance basis for up to 48 months. The turnaround time is expected not to exceed 72 hours.
Customers will, however, enjoy a repayment holiday on a case-by-case basis.
The deal is expected to boost the auto dealer’s sales amid an overall slump in the new vehicle industry.
Total unit sales in the formal vehicle sector shrunk 6.3 percent to 13,352 from 14,250 in the year to December 2022.
The shortage of semiconductors —used in electronic devices— has hurt the production of global automakers. Semiconductors are used to control electrical current, making them essential in battery management and in-car entertainment, among other systems.
