The Central Bank of Nigeria (CBN), on Wednesday slashed interest rates on its facilities through participating Other Financial Institutions (OFIs) from 9% to 5% per annum as part of measures to cushion the impact of coronavirus pandemic on households, businesses and regulated institutions.
The new rate which takes effect from March 1, 2020 will run for one year.
In a circular signed by its Director, Financial Policy and Regulation Department , Kevin Amugo, and issued in Abuja, the CBN also announced that its intervention facilities obtained through participating OFIs – Microfinance Banks (MFBs), Primary Mortgage Banks, and Institutions, among others – will be given a further one-year moratorium on all principal repayments, also effective March 1, 2020.
According to the circular, OFIs have equally been granted leave to consider temporary and time limited restructuring of the tenor and loan terms for households and businesses affected by COVID-19, subject to the recently issued guidelines for restructuring affected credit facilities in the OFI sub-sector.
The decision comes ahead of the Monetary Policy Committee (MPC) meeting of the CBN which begins on Thursday in Abuja.
CBN Director, Corporate Communications Department, Isaac Okorafor who further explained the new measures said the approval by the management for the restructuring of credit facilities in the Other Financial Institutions (OFI) sub-sector aligns with the bank’s desire to alleviate momentary strain on households, businesses and regulated institutions triggered by the lockdown due to COVID-19.
He explained that the CBN will continue to monitor developments and implement appropriate measures to safeguard financial stability and support stakeholders impacted by the COVID-19 pandemic.
