CBN reduces interest rates on loans for OFIs

The Central Bank of Nigeria (CBN) has reduced interest rates on its facilities through participating Other Financial Institutions (OFIs) from 9% to 5% per annum for one year effective March 1, 2020

This, the bank, said is to mitigate the impact of the coronavirus impact on households, businesses and regulated institutions.

The CBN, in a circular issued and signed by the Director, Financial Policy and Regulation Department, Kevin Amugo, on Wednesday in Abuja, said: “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 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.”

Explaining the decision, CBN’s 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 also stated that the CBN “would 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 today Thursday, May 28, 2020.