CBN slashes special interest rate to 5%, directs banks to restructure loan terms

The Central Bank of Nigeria (CBN) has disclosed that the interest rates on all applicable apex bank’s intervention facilities have been reduced from 9% to 5% per annum for 1 year effective March 1, 2020. This was disclosed by the CBN Governor Godwin Emefiele during a press briefing on Monday. 

The apex regulator at the event presented some policy measures to help reduce the effect of COVID-19 popularly referred to as coronavirus on businesses and families as the effect of virus poses a serious challenge on the global economy. 

What it means: Interest rates on all applicable CBN intervention facilities are hereby reduced from 9% to 5% per annum for 1 year effective March 1, 2020. This means that any intervention loan currently under moratorium is hereby granted an additional period of one year,” Emefiele said.

A moratorium is the delay period which is given before the payment of a loan.

Some of the other policy measures include the provision of N50 billion credit facility for households and small and medium scale enterprises, the extension of the moratorium on its intervention funds by one year. 

In addition, CBN will provide credit support to the health industry in the form of loans to hospitals, health care practitioners and pharmaceutical companies. 

Meanwhile, the apex bank also grants all deposit money banks leave to consider temporary and time-limited restructuring of the tenor and loan terms for businesses and households most affected by the outbreak of Covid-19 particularly oil & gas, agriculture, and manufacturing.

He said, “The CBN would work closely with DMBs to ensure that the use of this forbearance is targeted, transparent and temporary, whilst maintaining individual DMB’s financial strength and overall financial stability of the system.”

It has also extended intervention facilities and loans to pharmaceutical companies intending to expand/open their drug manufacturing plants in Nigeria, as well as to hospital and healthcare practitioners who intend to expand/build the health facilities to first-class centres.

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