Coronavirus: CBN Suspends Repayment Of Loans For One Year

The Central Bank of Nigeria (CBN) has suspended repayment of COVID-19 intervention loan for one-year while directing banks and other financial institutions to restructure their loan tenor and terms. The suspension, according to the CBN, was to help households and businesses mitigate the impact of COVID-19 on their finances.

The CBN placed moratorium on all repayments, stating that the suspension became effective March 1, 2020. This directive implies that banks and other financial institutions will extend the due date for the loan repayments, a circular signed by the Director, Financial Policy and Regulation Department, Kevin Amugo, disclosed.

“The CBN intervention facilities obtained through participating OFIs will be given a further one-year moratorium on all principal repayments, also effective March 1, 2020,” it stated. Meanwhile, the intervention loans are also being offered at five per cent as against the nine per cent per annum for one year, also effective from March 1, 2020.

AllNews recall that the intervention fund had become necessary following the lockdown of businesses, both formal and informal sectors, due to the coronavirus pandemic. The lockdown lasted for almost two months, while some businesses are gradually reopening to the customers now, some sectors like tourism, aviation, entertainment are still on lockdown.

The lockdown has affected many households and companies' revenue suffered, leading to some companies downsizing, and slashing salary. This led to the CBN, through its participating banks and other financial institutions, to intervene in their financial needs with credit that comes with lower interest rate.

Aside from halting loan repayment, banks and other financial institutions were also offered leave to temporary restructure time-bound tenor and loan terms for affected households and families. The CBN said it will continue to monitor the COVID-19 situation and implement necessary measures to alleviate the adverse effects of COVID-19 on all, including stakeholders.