Nigerian Banks To Restructure Loan Terms, Interest Rate Now 5%

The Central bank has announced six new policies to soften the burden of the impact of the Coronavirus pandemic on the Nigerian economy.

Among the policies put in place is a directive to all deposit money banks in the country to restructure loan terms and tenors to businesses affected by the pandemic.

Addressing journalists in Abuja on Monday, Godwin Emefiele, the CBN governor, said the interest rate of its intervention programmes has been cut to 5% from 9%.

“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,” he said.

“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 apex bank announced five policies in total.

The CBN said beneficiaries of its intervention facilities have been granted an additional one-year moratorium on principal repayments effective March 1, 2020.

“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 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”.

This is the first action the central bank is taking in response to the coronavirus outbreak that began in China in December.