Nigeria: CBN Halts Covid-Linked Relief On Loans, Takes Interest Rate Back to 9 Percent

Interest will no longer be five per cent on Anchor Borrowers, Commercial Agricultural Credits Scheme, Micro-Small and Medium-scale Enterprise, or Agri-Business/Small and Medium Enterprise Investment Scheme (AGSMEIS).

The Central Bank of Nigeria says it has changed interest rates on all its applicable intervention facilities from five per cent per annum back to nine per cent.

The bank had in the heat of the pandemic in 2020 announced a reduction of interest rates on all its intervention facilities from nine per cent to five per cent per annum for one year, as part of policies to cushion the negative impact of the deadly coronavirus on Nigerian businesses and economy.

At the time, the bank said it had about N3 trillion in various intervention programmes it operated through commercial banks.

They include the Anchor Borrowers, Commercial Agricultural Credits Scheme, Micro-Small and Medium-scale Enterprise, or Agri-Business/Small and Medium Enterprise Investment Scheme (AGSMEIS) programmes.

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

More money for Nigerians as CBN asks banks to pay higher interest on savings

“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 COVID-19 pandemic on the Nigerian economy), the Central Bank of Nigeria hereby reverts the interest rate on all its intervention facilities to 9 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 per annum; all existing intervention facilities granted prior to July 2022 shall be at 9 percent per annum effective from September 1, 2022.

“Further inquiries on the provisions of this Circular may be referred to the Director, Development Finance Department.”

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