CBN Suspends COVID-Linked Loan Relief And Raises Interest Rates To 9%

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According to the Central Bank of Nigeria, interest rates on all applicable intervention facilities have been reduced from 5% to 9% per year.

In the midst of the pandemic in 2020, the bank announced a one-year reduction in interest rates on all its intervention facilities from 9% to 5% as part of policies to mitigate the negative impact of the deadly coronavirus on Nigerian businesses and the economy.

At the time, the bank stated that it had approximately N3 trillion in various intervention programs run through commercial banks.

Anchor Borrowers, Commercial Agricultural Credits Scheme, Micro-Small and Medium-scale Enterprise, and Agri-Business/Small and Medium Enterprise Investment Scheme (AGSMEIS) are examples of such programs.

The bank stated at the time that it had approximately N3 trillion in various intervention programs run through commercial banks.

Anchor Borrowers, Commercial Agricultural Credits Scheme, Micro-Small and Medium-scale Enterprise, and Agri-Business/Small and Medium Enterprise Investment Scheme (AGSMEIS) are some of the programs.

The CBN made the announcement in a circular signed by Chibuzo Efobi, the director of its financial policy and regulation department, on Wednesday.

“Further to our circular dated March 15, 2022 (Ref: FPR/DIR/PUB/CIR/001/040) extending the period of interest reduction to all intervention facilities from nine percent to five percent per annum (as part of measures to mitigate the negative impact of the COVID-19 pandemic on the Nigerian economy), the Central Bank of Nigeria hereby reverts the interest rate on all its intervention facilities to nine percent per annum,” the letter said.

“The reversed rates shall be implemented as follows: All intervention facilities granted effective July 20, 2022, shall be at a nine percent annual rate; all existing intervention facilities granted prior to July 20, 2022, shall be at a nine percent annual rate effective September 1, 2022.”