One of the challenges of businesses in our present day is funds, especially for businesses that crave growth from their current operations and output. This is the reason why a lot of people rush when they get a hint of any loan intervention or ease in accessing finance.
However, these loans always have interest rates attached and could be too high for businesses to pay back. Infact, some businesses may fold up without being able to return the loans and the interests attached, therefore reduction in the rates tends to encourage start-ups and business owners to borrow and nurture/grow their businesses, towards a better economy.
The CBN Governor, Mr. Godwin Emefiele disclosed that interest rates on all intervention funds should be reduced from 9% to 5% effective 1st March, 2020, in order to tackle the challenges raised by the Corona virus within the domestic economy. Also, all intervention loans currently under moratorium are granted additional moratorium of one year on all principal repayments effective March, 2020.
The Corona virus pandemic has caused an adverse effect in business activities, prompting the CBN to take this strategic measure.