What top countries charge for EV loans

From the newsletter

The majority of people in Africa cannot afford to purchase vehicles upfront, forcing them to rely on loans. This is especially true for electric vehicles, whose prices are higher than internal combustion engine vehicles meaning the cost of financing is crucial for their uptake. Mobility Rising has analysed the cost of EV loans in three major economies – Kenya, Nigeria and South Africa.  

• In our analysis, Kenya has the highest interest rates, mainly due to the high rates charged by asset lenders. It was followed by Nigeria, which has the second highest interest rates while South Africa has the cheapest loans.

• In all the three countries, the tenure of the loans ranges from one year to five years, enabling borrowers to spread their instalments over a defined period of time which lessens the repayment load.  

More details

• In Kenya, asset financiers such as M-Kopa and Watu Credit charge between 18% and 45% per annum for an EV loan. Commercial banks charge lower, with interest rates ranging between 16% and 18%. These rates are however often adjusted whenever the Central Bank of Kenya sets new benchmark lending rates.

• Bank loans in Nigeria, Africa’s most populous country, are costlier compared to Kenya at about 32% per year. However, asset finance loans in the West African country are comparatively cheaper than Kenya, ranging between 32% and 34%.

• In South Africa, EV loans are cheaper than in both Kenya and Nigeria as its financial market is more mature. Generally, EV loans in the country can be secured through various lenders offering personal loans, green loans, or car loans with discounts for EV purchases. Interest rates can range from around 5.79% to 7.50% per annum. 

• The three countries have taken different approaches in their monetary policies in recent months, which has affected their interest rates differently. The Central Bank of Nigeria (CBN) last adjusted its lending rate, the Monetary Policy Rate (MPR), on November 26, 2024. They increased it by 25 basis points to a new record high of 27.50%.

• The South African Reserve Bank (SARB) last adjusted the prime lending rate on January 30, 2025, when it was reduced by 25 basis points to 11%. On the other hand, the Central Bank of Kenya (CBK) last adjusted the Central Bank Rate (CBR) on April 8, 2025, lowering it to 10.00%. This will translate to lower interest charged on loans by Kenyan commercial banks. 

• High upfront costs remain a barrier for the purchase of EVs in Africa, making financing crucial for adoption. Limited resale market for EVs however makes banks cautious about loan approvals. Further infrastructure concerns, such as charging networks, affect loan viability.

• It is estimated that up to $8.9 billion will be needed to finance demand for electric two-wheelers alone by 2030. To help ease the financing burden, some governments are exploring tax incentives and loan guarantees to encourage EV financing.

Our take

• Monetary policy shifts have had significant impacts on loan interest rates across the three economies. While Kenya’s recent rate cuts might ease loan costs, broader systemic interventions such as tax incentives, resale market development, and infrastructure expansion are needed to make EV financing truly viable. 

• South Africa’s mature financial market enables cheaper EV loans through diversified lending options. The availability of green loans and car loans with EV discounts indicates a structured approach to EV financing. Kenya and Nigeria could learn from South Africa’s policy-driven incentives to create more affordable financing mechanisms.

• Nigeria’s bank loans are the most expensive among the three countries, yet asset financing is more affordable compared to Kenya. This suggests that private financiers are playing a bigger role in EV accessibility, but the high cost of capital remains an obstacle. Expanding blended financing—which combines private lending with public support—could help lower rates.