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CBN Issued Strong Warning To Nigerians To Shun Loan Sharks

Mr Godwin Emefiele, the Governor of the Central Bank of Nigeria (CBN), has warned Nigerians to avoid loan sharks because doing so comes with harsh terms and exorbitant interest rates that ultimately harm the borrower. As a result, he vowed to destroy loan sharks whenever and wherever he came across them, because they charge a 100% interest rate on any loan.

Emefiele advised loan applicants to approach banks or go to the NIRSAL microfinance bank’s website to access available facilities without relying on anyone or any organisation to help them.

The CBN Governor provided the recommendation at a press conference in Abuja on Tuesday to round out the 140th Monetary Policy Committee (MPC) meeting, the first in 2022.

He said: “If we see loan sharks, we shall deal with them. When we find them in an organised setting, we will deal with them. They’re mostly in rural areas and we are not the police to deal with them. Do not patronise loan sharks. Go to NIRSAL MFB. Fill out the forms and input your details. You don’t need to know anyone”.

According to him, ten members of the MPC were present and unanimously agreed to maintain all monetary policy settings, leaving the MPR at 11.5 percent, an asymmetric corridor of +100/-700 basis points around the MPR, the CRR at 27.5 percent, and the Liquidity Ratio at 30 percent.

The MPC, Emefiele stated, voiced concern about the country’s insecurity problems and asked for long-term solutions because the issue was threatening the country’s economic recovery and coordinated attempts to combat rising food prices.

The Committee also recommended for increased economic diversification initiatives, citing the negative repercussions of a heavy reliance on crude oil receipts.

Even as it praised the decreased trend in non-performing loans, the MPC recommended the federal government to seek more effective infrastructure financing (NPLs). Emefiele said there was no reason for Nigeria to lose sleep over advanced nations’ signaling of normalisation and withdrawal of assistance in the third world by raising interest rates, which eventually leads to capital flow reversals.

“Fortunately, when those loans were offered, they did not come into Nigeria. In the last two years, it’s been a gradual and systematic exit of foreign portfolios out of the country because they feel the yields are not as high and they look for more hedging efforts to help them.

“MPC adopted a policy that lowers interest rates and attracts borrowers who have projects to finance them. That is why in the last two years, we’ve boosted loans given to households and businesses to moderate inflation, boost manufacturing and all that.

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