According to Etop Ikpe, CEO and co-founder of AutoChek Africa (LinkedIn profile), while between 15 million and 17 million used cars are traded annually in Africa, less than 2% of them have institutional financing. Owing to a lack of data, closing this gap is a daunting prospect.

Ikpe said that while banks have the infrastructure, they lack data. To acquire that data, dealers are key, he added. He noted that dealers were incentivized to work with AutoChek Africa because they could then offer finance to their customers.

To this end, AutoChek has built a dealer management system, in addition to systems for credit origination and calculating residual values (working in partnership with independent workshops on the latter).

AutoChek Africa was founded in Nigeria in 2020 and is now present in nine African countries. This expansion has been driven by acquisitions. According to Ikpe, it is much cheaper for AutoChek to build its brand through acquisitions, rather than organically.

To date, the company has raised around $35 million U.S. in equity.

AutoChek Africa itself has lent $34 million to consumers to date, in addition to facilitating back lending of around $120 million. While AutoChek cannot match the interest rates of banks, they offer consumers convenience by making much quicker decisions, he said.

While AutoChek Africa Africa has modelled a default rate of 20%, the actual rate is currently around 8%, Ikpe said.

He was in conversation with AIMGroup principal Jonathan Turpin at AutosBuzz 2023, the AIM Group’s automotive conference in Lisbon, Portugal.

This post has been corrected and updated to reflect Jonathan Turpin conducted the interview.

Print Friendly, PDF & Email

Related Articles