Dow plunged as much as 12% while Abercrombie & Fitch close all North American stores from March 15, and in Europe, from March 16. These closures will last till March 28. Apple has closed its retail stores outside Greater China form March 14 to March 27. Apple CEO Tim Cook sys the tech giant is expanding corporate leave policies to accommodate convalescence, caring for sick loved ones, mandatory quarantining, other care challenges occasioned by school closures, personal or family health circumstances caused by COVID-19.
Here in Nigeria, the Central Bank of Nigeria (CBN) has announced an extension of moratorium from one to two years on its intervention loans as well as, the reduction of interest rates from 9 per cent to 5 per cent.
These measures, according to The Governor of the bank, Mr. Godwin Emefiele, at a press briefing in Abuja, Monday, were the bank’s first set of response to the Coronavirus global crisis. The package also included injecting an additional N50 billion into the NIRSAL Micro Finance Bank for on-lending to Small and Micro and Enterprises.
CBN also came up with regulatory forbearance to enable Deposit Money Banks to restructure their customers’ loans to reduce the financial obligations on households and businesses.
He noted that “The Coronavirus pandemic… had already led to unprecedented disruptions in global supply chains, a sharp reduction in crude oil prices, turmoil in the global stock and financial markets, widespread cancellations in sporting, entertainment and business events, lockdown of large source of the movement of persons, in many countries and intercontinental travel restrictions across critical air routes across the world.
“These outcomes have had adverse effects for key sectors including Oil and Gas, airlines, manufacturing, trade and consumer markets.
In fulfilling its financial systems stability mandate, the CBN announced support for affected households, businesses, regulated financial institutions and other.
“Accordingly, CBN hereby announces the following policy measures. Before I go into the details of that, as you may know, CBN, operating through our Deposit Money Banks has close to The CBN has close to N3 trillion in various forms of intervention facilities either through the Anchor Borrowers Programme, the Commercial Agriculture Credit Scheme, our Micro and Medium Enterprises programme or through our ASMIES programme.
“Since we expect that as a result of this pandemic, revenues that would accrue to businesses to runs their businesses not, to talk of paying their bank loans have become so short naturally, we expect that there would be difficulties by businesses to service their loans. “So we make the following proposition besides others that we will be making from time to time as we proceed in this journey.
“All CBN intervention facilities are hereby granted a further moratorium of one year on principal repayments, effective March 1, 2020.
“This means that any intervention loan currently under moratorium are hereby granted another moratorium on one year. Accordingly, participating financial institutions are hereby directed to provide new amortization schedules for all facilities for their beneficiaries.
“Interest rates on all applicable CBN intervention facilities are hereby reduced from 9 per cent to 5 per cent per annum for one year, effective March 1, 2020.
Creation of a targeted Intervention facility
“The CBN hereby establishes a facility through NIRSAL Micro Finance Bank to the sum of N50 billion for households and Micro, Small and Medium Enterprises that have been particularly hit by COVID-19, including but not limited to hoteliers, airlines providers, healthcare merchants and others.
Credit Support for Healthcare Industry
“To meet the potential increase in demand for health care services and products, CBN hereby opens for intervention facilities loans to pharmaceutical companies, intending to expand of intending to establish their own drugs manufacturing plants in Nigeria, as well as, to hospitals or healthcare practitioners who intend to expand or build healthcare facilities to first-class standards.
“This is in addition to growing the size of our interventions in the agricultural and manufacturing sectors in Nigeria.
Regulatory Forbearance “The CBN hereby grants all DMBs leave to consider temporary and time-limited restructuring of tenure and loan terms for businesses and households most affected by this outbreak of COVID-19, particularly the Oil & Gas, Agric, Manufacturing. The CBN will work closely with our DMBs to ensure that the use of this forbearance, is targeted, transparent and temporary while maintaining individual DMBs’ strength and overall financial stability of the system.
“What are we saying here? You took a loan from a bank and because there is a drop in your revenue, arising from the consequences of the COVID -19 pandemic, we are saying that the banks have been granted a dispensation where they should be able to restructure your loans for a longer tenure so that what you will re-paying to the banks as principal + interest is reduced substantially because of the fact that your loan would have been restructured for a longer tenure and possibly at a lower interest rate so that your business can remain alive.”