CBN cuts interest rate on OFIs facilities, granting one year moratorium

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CEM REPORT, LAGOS
The Central Bank of Nigeria, has cut down interest rates on its facilities through participating Other Financial Institutions, OFIs, from 9% to 5% per annum for one year, effective March 1

This is part of its monetary and financial policy measures to cushion the economic impact of the COVID-19 pandemic on households, and businesses.

CBN made this known in a circular signed by the Director, Financial Policy and Regulation Department, Kevin Amugo, and issued on Wednesday, May 27.

The circular also contained that 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

[ALSO READ] Microfinance Banks now have till 2022 to recapitalize – CBN

The circular read in parts:

’CBN Intervention facilities availed through participating OFIs are granted a further one-year moratorium on all principal repayments, effective March 1, 2020.

’Interest rates on the CBN intervention facilities through participating OFIs hereby reduced from 9% to 5% per annum for 1-year effective March 1, 2020.

‘’OFIs are 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 OFIs sub-sector.”

Expatiating on the decision of the Bank, the Director, Corporate Communications Department, Isaac Okorafor, said the management’s approval for the restructuring of credit facilities in 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 explained that CBN would also continue to monitor developments and implement appropriate measures to safeguard financial stability and support stakeholders impacted by the COVID-19 pandemic.

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