How Lack of Credit Access Is Affecting Car Prices, Dealers, and Buyers Across Africa
06 November, 2025
In most parts of the world, the auto industry runs on financing. In the US, over 85% of new cars and 55% of used cars are financed through loans or dealer credit (Source: Experian Automotive.)
In many African markets, that number is often below 10% — not because buyers don’t want cars, but because both dealers and customers lack structured access to financing.
That single gap shapes everything: car prices, dealership growth, and even who can own a vehicle.
But beyond individual affordability, there is a deeper structural issue: access to credit for both buyers and dealers plays a central role in shaping car pricing, dealership growth, and market availability.
This article explores how constrained credit access drives up vehicle prices, limits dealer potential, and restricts consumer choice across Africa.
Impact on Car Dealers
Dealerships face multiple challenges when credit access is limited:
- Growth ceiling. Without access to expansion capital or stock financing, many dealers remain small-scale. They may run a lot of 5-10 cars when they could manage 30 or 50 if financing existed.
- Higher risk and margin pressure. With thin inventory and slower turnover, each vehicle must carry a higher margin to cover cost of capital and risk. That increases pricing and reduces competitiveness.
- Inflexible consumer product. If a dealer cannot offer financing to buyers (or partner with a lender), they lose potential customers and fall behind competitors who do.
- Working capital strain. Dealers must juggle procurement, import logistics, clearing, maintenance, and showroom costs — without the buffer that dedicated inventory-credit provides. In Nigeria for instance, the auto finance market disbursed the equivalent of NGN 420 billion in 2023, yet only about 18-22% of vehicle purchases were financed via formal loans — highlighting how many dealers operate outside a robust credit system.
Broader Market & Economic Implications
The credit gap in the vehicle-commerce ecosystem does not just affect individual dealers or buyers — it affects the industry:
- Slower growth of formal dealership networks. Without structured financing, many dealers cannot scale, which reduces jobs, service-infrastructure, and round-the-clock operations.
- Higher share of used- and informal-market sales. As formal dealers struggle, informal channels fill the gap — often with fewer protections and higher risk.
- Lower technology/innovation adoption. Financed vehicle purchases enable newer models, better reliability, and better maintenance regimes. Without this, the fleet remains older, less efficient, and more costly to maintain. The broader SME credit gap in Africa is estimated at tens of billions of dollars. African Development Bank Vehicle financing sits within that gap and remains under-served — presenting both a challenge and an opportunity.
Moving Forward: What Dealers & Industry Players Should Consider
- Dealerships should adopt metrics such as inventory turnover, cost of hold, financing spread, days-to-sell, and build relationships with financiers who understand dealership cash-flow rather than treating dealers like retail consumers.
- Financing partners and fintechs must tailor products to the realities of dealership operations — inventory cycles, import/stock risk, resale value variation, and regional logistics.
- Industry and regulators should support fintech/asset-backed financing innovations, improve credit-bureau coverage, strengthen vehicle-registration systems, and reduce collateral/documentation bottlenecks. Structured financing aligned to dealer business models can lower cost of cars, increase availability, support faster growth and enhance competition.
Dealers across Africa are unlocking capital and expanding their lots with Shekel Mobility. You can too.
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How Lack of Credit Access Is Affecting Car Prices, Dealers, and Buyers Across Africa
In most parts of the world, the auto industry runs on financing. In the US, over 85% of new cars and 55% of used cars are financed through loans or dealer credit (Source: Experian Automotive.)
In many African markets, that number is often below 10% — not because buyers don’t want cars, but because both dealers and customers lack structured access to financing.
That single gap shapes everything: car prices, dealership growth, and even who can own a vehicle.
Getting Started: How to Create Your First Transaction on Shekel Mobility
So, you’ve successfully joined the Shekel Mobility community, and it’s great to have you on board!
Now, let’s walk you through the exciting process of initiating your first transaction. The process is seamless and designed to help you get started without any stress.
Here’s a simple step-by-step guide to creating your first transaction on the platform:
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