The Central Bank of Nigeria (CBN), has reduced interest rates on its facilities through participating Other Financial Institutions (OFIs) from nine per cent to five per cent per annum for one year effective March 1, 2020. The move was part of its continued effort to mitigate the impact of the corona virus (COVID-19) on households, businesses and regulated institutions.
The bank, in a circular signed by the Director, Financial Policy and Regulation Department , Kevin Amugo, and issued on Wednesday, May 27, 2020 in Abuja, also announced that CBN 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.
Expatiating on the decision of the Bank, the Director, Corporate Communications Department, Isaac Okorafor, said the Management approval for the restructuring of credit facilities in the Other Financial Institutions (OFI) sub-sector was in line 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 would also continue to monitor developments and implement appropriate measures to safeguard financial stability and support stakeholders impacted by the COVID-19 pandemic.
Meanwhile, the Monetary Policy Committee (MPC) meeting of the CBN for the month of May 2020, holds on Thursday, May 28, 2020.
