The Governor of the Central Bank of Nigeria, Godwin Emefiele, on Monday, said that the apex bank had restructured N7.8trillion loans for 35,640 customers.
Emefiele said the health crisis, ocassioned by the outbreak of coronavirus, would have resulted in a doomsday for the banking industry and the economy if the apex bank did not ask the banks to offer fore-bearance to their customers.
He said loans would have gone bad immediately the crisis occurred, based on the CBN prudential ratios.
According to the apex bank boss, when loans go bad, it means the customers would not be able to pay back, a development that would make the banking system to wobble.
Emefiele said these while speaking at the end of the Monetary Policy Committee meeting, held at the apex bank headquarters in Abuja.
On the strength of this fore-bearance, he said 22 banks, out of 27, had come to the central bank to restructure the loans of 35, 640 of their customers for about N7.8trillion.
This, he added, constituted 41 per cent of the total industry loans, which he put at N18.9trillion.
He said the N7.8trillion fore-bearance was low, as the apex bank would prefer a situation where the 41 per cent was raised to 65 per cent of the total loan portfolio of N18.9trillion.
He added, “We are working with the banks to give more fore-bearance to those customers. If we see fore-bearance moving to 60 or 65 per cent, we get more comfortable that we have been able to turn the corners by assisting businesses to get over their business and come again back to life.
“Loan fore-bearance has helped us prevent a doomsday scenerio for the economy.”
On the impact of the COVID-19 intervention fund, the Governor said over N152.9billion had been disbursed to 61 manufacturing companies, out of the N1trillion allocated for that sector.
He also said 20 healthcare projects had been funded to the tune of N26.27billion, out of the N100billion earmarked for that segment of the economy.
Under the Agricultural Small and Equity Intervention Fund, he said the apex bank had funded 11,613 businesses badly affected by the crisis with over N41billion.
Out of N50billion for the household and small enterprises affected by COVID-19, he said the CBN had disbursed to over 92,000 people, the sum of N49.15billion.
He said the MPC endorsed that the CBN needed to increase the household and SME facilities to accommodate more SMEs to help them easily recover from the crisis.
On the benchmark lending rate, he said the Monetary Policy Committee retained the Monetary Policy Rate at 12.5 per cent.
He also said the committee agreed to retain the Asymmetric Corridor of +200/-500 basis points around the MPR.
Also retained was the Cash Reserves Ratio, at 27.5 per cent; as well as the Liquidity Ratio, at 30 per cent.
Emefiele said that the decision to hold the monetary policy parameters was due to the fact that there was a need to strike a balance to support economic growth while reducing unemployment rate.
He also said the CBN had unlocked a total of N3.3trillion credit to the economy through the implementation of the Loan-to-Deposit Ratio.
Emefiele noted that the introduction of the LDR had enhanced credit into key sectors of the economy, adding that loans from banks to the economy had increased from N15.6trillion in June 2019 to N18.9trillion as of June this year.
He said the loans were granted to some of the productive sectors of the economy.
Giving a breakdown of the loan, he explained that the Manufacturing Sector received N815billion; Retail and Consumer Loan Sector received N615billion; Agriculture, Forestry and Fishery sector, N255billion; General Commerce, N221billion; Information Technology Communications, N208billion.
