CBN grants businesses one-year extension on loan repayment

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The Central Bank of Nigeria on Monday announced policy measures to tackle the impact of coronavirus on the businesses and the nation’s economy.

During a media brief in Abuja, the CBN Governor, Mr Godwin Emefiele, said that from March 1, the apex bank had granted a one-year moratorium on all of its intervention funds.

He also revealed that the CBN has provided a total of N3tn to the Small and Medium Enterprises sector of the economy.

According to him, the loans are given through the Commercial Credit Guarantee Scheme and the Anchor Borrowers Programme, among others.

Emefiele also said the bank had agreed to reduce the interest rate on all of its intervention funds from nine per cent to five per cent for a one-year period, effective March 1 this year, and also revealed that the Bank would create a N50bn credit facility to boost the economy.

The said fund will be disbursed through the NIRSAL Microfinance Bank for households and SMEs that had been particularly hard hit by Covid-19.

The credit would also be extended to hoteliers, airlines, service providers, and health care merchants, among others.

The CBN governor said the one-year moratorium was granted to reduce the burden of loan repayment by businesses.

This means that any intervention loan currently under moratorium has been granted additional one-year period.

Accordingly, the governor said participating financial institutions have been directed to provide new amortisation schedules for all beneficiaries.

To meet potential increase in demand for healthcare services and products, Emefiele said the CBN had opened for its intervention facilities loans to pharmaceutical companies intending to expand their drug manufacturing plants in Nigeria.

He said the facility would also be extended to hospital and healthcare practitioners intending to expand or build first-class health centres.

“We will also consider additional incentives to encourage extension of longer tenor-credit facilities. The DMBs are encouraged to continue to build capital buffers in order to improve resilience of the sector,”  he said.

He adde:, “The Central Bank of Nigeria in furtherance of its financial stability mandate is committed to providing support for affected households, businesses, institutions, and other stakeholders in order to cushion the adverse economic impact of this (coronavirus) pandemic.”

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