Will CBN’s new 5% interest rate ameliorate the effect of COVID-19 on Nigerians?

The Central Bank of Nigeria (CBN) on Monday reduced the interest rates in all its intervention facilities from 9 percent to 5 percent per annum for one year to ameliorate the effect of coronavirus pandemic.

The CBN Governor, Mr. Godwin Emefiele, who disclosed this at a press briefing in Abuja, said the reduction of the interest rates took effect from March 1.

He disclosed that the bank had also extended moratorium of all CBN intervention facilities on all principal repayment for one year effective from the same date.

According to the CBN governor, the implication of this is that any intervention loan currently under moratorium will be granted an additional period of one year.

He directed all financial institutions to provide a new schedule for all facilities for their beneficiaries.

Similarly, Emefiele noted that the apex bank had also created a facility through the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) Micro Finance Banks to support households and Micro, Small and Medium Enterprises (MSMEs) that had been hit by COVID-19.

He said the sum of N50 billion would be given through NIRSAL to support business owners like hoteliers, airlines, service providers, and healthcare merchants among others.

Emefiele also announced credit support for healthcare industry to meet potential increase in demand for healthcare services and products.

He said: “CBN hereby, opens its intervention facilities, loans to pharmaceutical companies intending to expand or establish their own drugs manufacturing companies in Nigeria.

“This will also be extended to hospitals and healthcare practitioners who intend to expand or build healthcare facilities to the first-class standards.

“This is in addition to growing the size of our existing intervention to the agriculture and manufacturing sectors in the country.”

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