Autochek Launches Autochek Financial Services to Power Auto Finance in Africa

Owning a car is out of reach for more than 90% of the population of Nigeria. But this problem is not just Nigerian. The purchasing power of vehicles is extremely low in Africa, which explains why second-hand cars are common and the number of car owners is less than 45 cars per 1,000 people, compared to 816 per 1,000 people in the States. -United. While this issue shows a huge market for car financiers, the reality in Africa is that car finance is dominated by traditional banks and characterized by high interest rates and prohibitive lending criteria, making car loans inaccessible to the average African.

Since Autochek was founded in 2020, the startup has raced to solve the challenge of vehicle financing by connecting financiers with creditworthy customers. In two years, Autochek claims to have worked with “over 70 financial institutions and over 2,000 dealerships to process over 80,000 auto loan applications.”

Autochek’s model may be more advantageous for average Africans looking to own cars, as the company is among the small group of African startups that provide vehicle financing for non-commercial purposes. Other players like Max and move providing auto financing to gig workers and mobility entrepreneurs who drive to own the cars funded on platforms like Uber and Bolt. Yet it is perhaps more prone to customer defaults because it is generally more difficult to predict the long-term financial situation of the average African.

Unaffected by uncertainty, or perhaps bolstered by confidence in their credit check systems, Autochek is launching its in-house auto finance arm dubbed AutoChek Financial Services, which will redouble its efforts to democratize auto finance for creditworthy individuals. Africans. This new arm of the company will operate a B2B and B2C model for vehicle finance in Africa.

“This [Autochek Financial Services] will also provide best-in-class technology and advisory solutions to car dealerships, financial institutions and other stakeholders in the African automotive ecosystem, helping them improve credit decisioning, collections, pricing, portfolio management and product development, as well as to provide a better customer experience,” reads Autochek’s statement.

AutoChek, which has a strong presence in East, West and North Africa (mainly by acquiring similar companies in these regions), chose South Africa as the headquarters of AutoChek Financial Services, where the automotive finance subsidiary will be led by Johan van der Merwe, a financial services expert “with over 20 years of experience in risk, credit and asset finance”. Prior to this role, Merwe served as Chief Risk Officer at WesBank Motor, a major automotive financier in South Africa, and SA Taxi, a similar company that integrates insurance into its automotive offerings. Merwe brings Africa-focused automotive and e-commerce business experience – spanning over 60 years – to his role as CEO of Autochek Financial Services.

“There is a great opportunity to create shared value for consumers, manufacturers, financial institutions, and other stakeholders by unlocking financing, and I strongly believe we can build the infrastructure to make it happen. Etop [AutoChek’s group CEO] and the team have done an outstanding job of delivering the success that Autochek has enjoyed to date and I look forward to working with them to deliver more success and more growth in the automotive sector on the continent,” Merwe told about his new role.

Johan van der Merwe, CEO, Autochek Financial Services

Etop Ikpe, CEO and Co-Founder of AutoChek Group, was enthusiastic about Merwe’s capabilities, saying he is well placed to work with the extended team to drive Autochek’s vision of making automotive finance current and hassle-free.

“Johan brings a wealth of experience to Autochek Financial Services and we are delighted to have him alongside us as we build the infrastructure to transform the automotive trade across Africa. We want to give more Africans seamless access to auto finance and we look forward to providing more solutions to bridge the affordability gap and make it easier for more Africans to buy the vehicles they want,” she said in her statement.

Autochek may have made a name for itself as a reliable player in the African automotive market ecosystem, but its solutions are still in their infancy. With this foray into full-fledged auto financing for Africans, Autochek is entering a huge, under-explored and risk-prone market. It will be interesting to see how this plays out for the startup and, by extension, self-financing in Africa.

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