The Central Bank of Nigeria (CBN) has ordered all deposit money banks in the country to restructure loan terms and tenors to households and businesses affected by the coronavirus outbreak.
The governor of the apex bank, Godwin Emefiele announced a six initial policy measures to mitigate the impact of COVID-19 pandemic on the Nigerian economy while briefing journalists in Abuja.
Emefiele said the interest rate of its intervention programmes has been cut to 5% from 9% adding that this decision to cut rates is a global pattern among Central Banks across the world.
He said this is part of the resilient measures being put in place by fiscal authorities to aid the growth of a declining economy.
Emefiele 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.”
The CBN also announced that beneficiaries of its intervention facilities have been granted an additional one-year moratorium on principal repayments effective March 1, 2020.
A moratorium is the delay period which is given before the payment of a loan.
“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 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-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.”