COVID-19: CBN Cuts Interests On MFBs, Mortgage Banks’ Facilities To 5%

COVID-19: CBN Cuts Interests On MFBs, Mortgage Banks’ Facilities To 5%

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Post Views: 139 In a continued effort to mitigate the impact of the Coronavirus (COVID-19) pandemic on households, businesses and regulated institutio...

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In a continued effort to mitigate the impact of the Coronavirus (COVID-19) pandemic on households, businesses and regulated institutions in the country, the Central Bank of Nigeria (CBN), on Wednesday announced an interest rate cut on its facilities through participating Other Financial Institutions (OFIs) from 9% to 5% per annum for one year, with effect from March 1, 2020.

According to a circular by its Director, Financial Policy and Regulation Department, Kevin Amugo, and issued on Wednesday, May 27, 2020, in Abuja, the CBN intervention facilities obtained through participating OFIs such as 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 were equally 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 CBN management’s approval for the restructuring of credit facilities in the OFI sub-sector was in line with its desire to alleviate momentary strain on households, businesses and regulated institutions triggered by the lockdown due to COVID-19.

He assured 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 will hold on Thursday, May 28, 2020.

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