Nigeria extends forbearance on loans impacted by COVID-19 pandemic

ABUJA: 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 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 had said it will restructure half of its loans, mainly in the oil and retail sectors.