By our reporter| The Central Bank of Nigeria (CBN) in an effort to mitigate the effects of Coronavirus outbreak on the country’s economy, on Monday asked all banks in the country to restructure loan terms and tenors to households and businesses.
The apex bank governor, Godwin Emefiele, who gave the directive at a press conference in Abuja, said the interest rate of its intervention programmes has been cut to 5% from 9%.
The CBN boss further revealed that beneficiaries of its intervention facilities have been granted an additional one-year moratorium on principal repayments effective March 1, 2020, and that a N50 billion credit facility for small and medium-sized businesses that have been created for those affected by the coronavirus outbreak.
He said, “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.”
“This means that any intervention loan currently under moratorium is hereby granted an additional period of one year.”
“Interest rates on all applicable CBN intervention facilities are hereby reduced from 9 to 5% per annum for 1 year effective March 1, 2020.”
“The CBN hereby establishes a 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, etc.”
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”.
“The bank stands ready to provide liquidity backstops as and when required in view of its role as banker to the federal government and lender of last resort.”