Nigeria: CBN reduces interest rates on OFIs from nine percent to five percent

The Central Bank of Nigeria (CBN) has reduced interest rates on its facilities through participating Other Financial Institutions (OFIs) from nine percent to five percent per annum for one-year, effective March 1, 2020, according to a news report by This Day.

This step is taken as part of its continued efforts to mitigate the impact of COVID-19 on households, businesses, and regulated institutions.

In a circular signed by the Director, Financial Policy and Regulation Department, Kevin Amugo, posted on its website yesterday, said CBN intervention facilities obtained through participating OFIs Microfinance Banks (MFBs), Primary Mortgage Banks and institutions, among others, would be given a further one-year moratorium on all principal repayments, also effective March 1, 2020.

According to the circular, OFIs have also been 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 OFI sub-sector.

Expatiating on the decision of the bank, the Director, Corporate Communications Department, Isaac Okoroafor, said the approval 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.