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Nigeria extends forbearance on loans impacted by COVID-19 pandemic

Published 04/03/2021, 14:17
Updated 04/03/2021, 14:18
© Reuters.

ABUJA, March 4 (Reuters) - Nigeria's central bank said on
Thursday it has extended a regulatory forbearance on
restructured loan facilities impacted by the COVID-19 pandemic.
The bank last year launched several intervention programs to
try to help stimulate the economy battered by the pandemic. It
is also setting up a new company to tackle infrastructure
shortages in Nigeria. It asked lenders to give customers more time to repay loans
and created a fund to combat the impact of the pandemic, which
triggered an oil price crash, weakened the currency NGN=D1 and
plunged the country into recession.
Nigeria emerged from recession in the fourth quarter of
2020, despite a contraction in the year as a whole. But growth
is fragile as weak infrastructure has stymied the economy for
decades, holding back wealth distribution in Africa's biggest
economy.
The regulator said it will extend by one year the lower
interest rates it has offered on intervention funds granted to
businesses, as part of measures to mitigate the impact of the
pandemic. The central bank had reduced interest rates to 5% per
annum from 9% on intervention loans last year.
Also, with a one-year moratorium on principal having ended
last month, it said a roll-over of the moratorium will be
considered on an individual basis.
By June, Nigerian lenders had received a request to
restructure over a third of loans mostly in the manufacturing
and general commerce sectors after running into repayment
problems due to the pandemic. Mid-tier lender FCMB FCMB.LG had said it will restructure
half of its loans, mainly in the oil and retail
sectors.

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