Banks’ customers servicing credit facilities are now paying more than they bargained for after the devaluation of the naira and the hike in interest rate by 100 basis points to 13 per cent.
Interest on their credit has been reviewed upwards by over 3 per cent to 28 per cent or 30 per cent as the case may be.
A letter to that effect to a bank’s customer sighted by TheNiche said in view of the upward review of interest rate by the Central Bank of Nigeria (CBN), coupled with the devaluation of the naira, the interest on his credit facility has been raised from 25 per cent to 28 per cent.
In the letter, the bank (name withheld) told the customer (an entrepreneur) that all other terms of the credit facility subsist, implying that the tenor of the loan remains the same.
It was learnt that it is a normal condition in loan offer terms as interest is usually pegged at floating rates. This means that interest is usually reviewed based on CBN prevailing rates.
Checks by TheNiche confirmed that the development affects those on the verge of taking the loan before the CBN announced the new policy rates hike and naira devaluation.