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

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.

Following our circular dated March 15, 2022 (Ref: FPR/DIR/PUB/CIR/001/040) extending the period of interest reduction to all intervention facilities from 9% to 5% 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 9% per annum,” the letter stated.

“The reversed rates will be implemented as follows: all new intervention facilities granted after July 20, 2022, will be at a 9 percent annual rate; all existing intervention facilities granted before July 20, 2022, will be at a 9 percent annual rate effective September 1, 2022.”