The Central Bank of Nigeria (CBN) has directed all deposit
money banks in the country to restructure loan terms and tenors to households
and businesses affected by the coronavirus outbreak.
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 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,” Emefiele said.
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.”
This is the first action the central bank is taking in
response to the coronavirus outbreak that began in China in December.
The US federal reserve, on Sunday, announced that it has cut
interest rates to near-zero to combat the economic impact of the coronavirus.
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