In a significant policy shift, the Central Bank of Nigeria (CBN) has temporarily halted the acceptance of new loan applications under its development finance intervention funds.
This change was communicated through a circular addressed to the Chief Executives of banks and signed by Sa’ad Hamidu, the Acting Director of the Development Finance Department at CBN.
The circular, titled “Suspension of Acceptance of New Applications under the Existing Central Bank of Nigeria, CBN Development Finance Intervention Programme,” outlines the CBN’s decision to withdraw from direct development financing interventions.
Instead, the apex bank aims to transition into a role focused on limited policy advisory functions supporting economic growth.
The CBN emphasized that banks will now bear the responsibility for recovering loans previously granted under the development finance intervention funds.
The circular urged banks to communicate this change to their customers, stressing that interest rates and other terms and conditions on existing facilities will remain unchanged as specified in their respective approval letters.
The central bank’s decision aligns with its renewed policy thrust, prioritizing the core mandates of ensuring price and monetary stability.
This strategic move marks a departure from direct involvement in development financing, signaling a shift toward more advisory functions to stimulate economic growth.
Industry analysts speculate that this move may have been prompted by the need to encourage banks to strengthen their risk management practices and take a more active role in assessing and mitigating the potential risks associated with loan portfolios.
The CBN’s decision places a heightened emphasis on the banking sector’s role in facilitating sustainable economic development.
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