CBN asks banks to restructure loan terms and cut interest rates to 5%
The Central Bank of Nigeria (CBN) has called on all deposit banks in the country to restructure the terms and terms of loans to households and businesses affected by the coronavirus outbreak.
Speaking to reporters on Monday in Abuja, Godwin Emefiele, governor of the CBN, said the interest rate on its intervention programs had been cut from 9% to 5%.
“The CBN hereby grants all depository banks permission to consider a temporary and time-limited restructuring of loan duration and conditions for businesses and households most affected by the Covid epidemic -19, especially oil and gas, agriculture and manufacturing, ”he said. .
“The CBN would work closely with the DMBs to ensure that the use of this forbearance is targeted, transparent and temporary, while maintaining the financial strength of each DMB and the overall financial stability of the system.”
Apex Bank has announced five policies in total.
The CBN said beneficiaries of its response facilities have been granted an additional one-year moratorium on principal repayments as of March 1, 2020.
“This means that any intervention loan currently under moratorium is granted an additional period of one year,” Emefiele said.
A moratorium is the time that is granted before a loan is paid.
“The interest rates on all applicable CBN intervention facilities are reduced from 9 to 5% per annum for 1 year from March 1, 2020.”
Apex Bank said it has created a N50 billion credit facility for small and medium-sized businesses that have been affected by the coronavirus outbreak.
“The CBN hereby establishes a facility through the NIRSAL microfinance bank for households and small and medium enterprises (SMEs) which have been
particularly affected by Covid-19, including but not limited to hoteliers, airline service providers, healthcare traders, etc. “
It has also extended response facilities and loans to pharmaceutical companies “intending to expand / open their drug manufacturing plants in Nigeria, as well as hospitals and healthcare professionals who intend to to extend / build health establishments into first-class centers ”.
“The bank is ready to provide liquidity guarantees when needed given its role as the federal government banker and lender of last resort.”
This is the first step taken by the central bank in response to the coronavirus outbreak that began in China in December.
The US Federal Reserve announced on Sunday that it had lowered interest rates to near zero to combat the economic impact of the coronavirus.