Nigeria’s Central Bank Reverses COVID-19 Loan Interest To 9%

The Central Bank of Nigeria (CBN) has reversed the interest rate on intervention loan extended towards small, medium and large scale companies to alleviate COVID-19 impact on their operation.

CBN restored the interest rate to 9 percent, having issued the loan on a 5 percent rate since the coronavirus outbreak in 2020, and had extended the rate twice to cushion the impact of the economic downturn.

In a circular dated August 17, and sent to all banks and other financial institutions, the central bank stated that loans issued prior to July 20, 2022, will bear 9 percent rate from September 1, 2022.

It also directed banks and other financial institutions to start charging 9 percent on loans issued from July 20, 2022, bringing an end to the CBN COVID-19 palliative for companies.

The statement signed by the CBN’s Director Financial Policy and Regulation Department, Chibuzo Efobi, reads; “Further to our Circular dated March 15, 2022 (Ref: FPR/DlR/PUB/ClR/001/040) extending the period of interest rate reduction on all intervention facilities from 9 per cent to 5 per cent 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 per cent per annum.

According to the circular, the revised rate shall be implemented as follows, “All intervention facilities granted effective July 20, 2022 shall be at 9 per cent per annum.” Adding, “All existing intervention facilities granted prior to July 20, 2022 shall be at 9 per cent per annum effective September 1, 2022.”