The Central Bank of Nigeria (CBN) Monday cut interest rates on all applicable CBN intervention facilities from 9 to 5 percent per annum for one year effective March 1, 2020.
The apex Bank also granted a further moratorium of one year on all principal repayments and created a N50bn facility through the NIRSAL Microfinance Bank for households and small- and medium-sized enterprises (SMEs) that have been particularly hard hit by Covid-19, including but not limited to hoteliers, airline service providers, health care merchants, among others.
Briefing Journalists, CBN Governor, Godwin Emefiele explained that the apex Bank acted in response to the coronavirus pandemic which has devastated the global economy, creating disruptions in global supply chains, sharp reduction in crude oil prices, turmoil in global stock and financial markets.
Explaining further, Emefiele said: “All CBN intervention facilities are hereby granted a further moratorium of one year on all principal repayments, effective March 1, 2020. This means that any intervention loan currently under moratorium are hereby granted additional period of one year. Accordingly, participating financial institutions are hereby directed to provide new amortization schedules for all beneficiaries.”
Other policy measure unveiled by the CBN include:
SUPPORT FOR HEALTHCARE INDUSTRY: The CBN hereby opens for its intervention facilities, 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. This is in addition to growing the size of existing interventions to the Agricultural and Manufacturing sectors in Nigeria.
REGULATORY FORBEARANCE:
The CBN hereby 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. 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.
CBN also pledged to consider additional incentives to encourage extension of longer tenured credit facilities, adding that DMBs are encouraged to continue to build capital buffers in order to improve resilience of the sector.
