Happening Now: CBN extends discounted interest rate on its Intervention Schemes

The Central Bank of Nigeria (CBN) has announced the extention of the "5% reduced interest rate" on all its Intervention Facilities by another one year (12 months), as part of measures to mitigate the negative impact of COVID-19 Pandemic on the Nigerian Economy.

This is contained in a Circular tittled "Circular to all Banks and Other Financial Institutions (OFIs), Re: Regulatory Forbearance for the restructuring of Credit Facilities of other Financial Institutions Impacted by COVID-19" dated 3rd March, 2021 and signed by the CBN Director of Financial Policy and Regulatory Department, Dr Kevin Amugo.

The apex bank noted that due to the negative impact of the COVID-19 Pandemic on the Nigerian economy, it had earlier reduced the interest rates on the CBN Intervention Facilities from 9% to 5% per Annum for one year which was effective from 1st March, 2020 and expired in February, 2021.

However, with due consideration of the second wave of the Pandemic and continued efforts on the Nigerian economic recovery, the CBN has extended  the "discounted 5% interest rate" on its Intervention Facilities by another 12 months which would expire on 28th February, 2022.

The apex bank added that Credit Facilities, availed through participating banks and OFIs, were also granted a one year Moratorium on all principal payments which was also effective from 1st March, 2020, however, "the roll over  of the Moratorium on the above facilities, shall be considered on a case by case bases".

Among the CBN Intervention Programmes/Facilities earlier considered for the one year discounted 5% Interest rate are the COVID-19 Targeted Credit Facility, AGSMEIS Loan, Anchor Borowers Programme, the Nigerian Youth Investment Fund (NYIF) etc, which would benefit from this extention.

By the expiration in February, 2022, and with no further extention from the apex bank, the interest rate on the Principals would revert to 9% Interest rate for the remaining years of the duration.

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