THE ECONOMIC DOWNTURN, CRISIS OR OPPORTUNITY?
Autochek Financial Services
A Pan-African finance company that strives to give the best mobility solutions to every customer.
The current economic downturn has had a huge impact on global currencies, resulting in the US Dollar appreciating significantly against most African currencies. Rising interest rates and racing inflation has caused a massive headache for central banks across the continent. Large lenders are more cautious and have tightened their lending criteria, making it harder for borrowers to access credit.? This is a critical issue for both individuals and businesses.
The automotive industry has been equally affected, despite vehicles being an essential part of everyday life for most Africans, vehicle ownership remains relatively low, with 44 vehicles per 1,000 people, compared to the global average of 180.? Auto credit penetration currently stands at around 2 percent in Africa, compared with the average of around 60-75 percent in emerging markets.
This speaks to a great opportunity for us to make inroads in creating credit solutions for millions of Africans who cannot access car loans from traditional lenders and must spend years building their savings to own a car outright.? Despite being a $45bn industry, Africa’s automotive market only has a 5% financing penetration rate (compared to 80% in China, 75% in Indonesia, and 70% in India respectively).?
Our core business as Autochek Financial Services is providing technology and advisory solutions that support car dealers, financial institutions, and other stakeholders in Africa’s automotive ecosystem. We could lament the situation or demonstrate our capability by using our learnings to help our partners improve credit decisioning, collections, pricing, portfolio management, and product development, as well as deliver an enhanced customer experience.
The saying Diamonds are forged in fire is true for the African context where challenges exist however it provides us with the opportunity to innovate, improve and address the specific market need. Do you agree or disagree?