Customers accessed loans worth N3.38tn at single-digit interest rates under the Central Bank of Nigeria’s intervention funds as of the end of June.
A member of the Monetary Policy Committee meeting, Aliyu Sanusi, disclosed this in his personal statement at the last MPC meeting.
According to reports released by the CBN, “Analysis of the interest rate band reveals that 65.9 per cent of customers borrowed a total of N4.77tn at interest rates of less than 15% as of June 2022, suggesting that interest rates are declining as credit to the real sector of the economy continues to increase.
“As of June 2022, a total of N3.38tn was lent to beneficiaries at less than a 10 per cent interest rate through the CBN intervention funds.”
Recently, the CBN reversed its five per cent intervention loans granted before July 20, 2022, to cushion the effect of COVID-19 on the economy to nine per cent effective from September 1, 2022.
It disclosed this in a circular to all banks and Other Financial Institutions titled, ‘Adjustment of interest rate on all Central Bank of Nigeria interventions’, which was signed by the Director, Financial Policy and Regulation Department, Chibuzo Efobi.
The banking regulator maintained that interest rates on intervention loans granted after July 20 at nine per cent.
It stated in the circular that, “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 per cent to five 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 nine per cent per annum.
“The reversed rates shall be implemented as follows: All intervention facilities granted effective July 20, 2022 shall be at a nine per cent per annum.”
“All existing intervention facilities granted prior to July 2022 shall be at nine per cent per annum effective from September 1, 2022.”
It would be recalled that in March 2020, as part of measures to respond to COVID-19 outbreak, the CBN reduced interest rates on its intervention facilities from nine per cent to five per cent.