CBN halts new loan applications in a shift from development financing approach

In a significant policy shift, the Central Bank of Nigeria (CBN) has announced the suspension of new loan applications under its development finance intervention funds scheme. This move represents a departure from the central bank’s previous emphasis on development finance intervention funds, which were once considered a central focus.

Deposit Money Banks are now tasked with the responsibility of recovering loans already disbursed under this initiative. The decision was communicated to bank CEOs through a circular issued by Sa’ad Hamidu, the Acting Director of the Development Finance Department, on Tuesday.

The circular, titled ‘Suspension of Acceptance of New Applications under the Existing Central Bank of Nigeria, CBN Development Finance Intervention Programme,’ stated, “In furtherance of the Central Bank of Nigeria’s new policy thrust focusing on its core mandate of ensuring price and monetary stability, the Bank has commenced its pullback from direct development financing interventions.”

As part of this transition, the CBN aims to assume a more limited role focused on policy advisory functions that support economic growth. Consequently, the CBN has officially halted the acceptance of new loan applications for processing under any of its existing intervention programs and schemes.