KiksAsso:
Can somebody just tell me in clear terms if the current interest rate of 25% on my loan will be reduced to 23% following this development?.
I have experinced a total of 3% increase in the original interest rate and each increment was attributed to increase in lending rate by CBN.

It largely depends on the initial agreement in your term sheet. Did you agree on a fixed rate or a floating rate hinged on the MPR?
If you are not sure, just speak to your banker

My guess is that it's a floating rate, based on your comment. So your interest rate may likely be reduced. Speak to your banker still

cecegorz:


It's a mixed bag.
MPR reduction from 13% to 11% ordinarily means banks will get their funding at a cheaper rate and consequently lend at lower rates to customer too - ceteris paribus, like the economists say. But that's as simple as it gets.
Currently, most banks loan book is bursting at the seems, so many non-performing loans in the hands of customers who can't pay back mostly because the economy is on a downward spin, businesses are failing and some are closing shop.
It then goes that if banks has so much funds out there that are not being repaid already, they will be unwilling to lend further to avoid more bad loans.
On the other hand, you also need money to stimulate a drowning economy. So with CRR down from 25% to 20%, it means extra liquidity for the banks, and some with greater risk appetite may still stick out their necks and lend to some specific markets.
So if the banks can consequently open the taps, 'the average Nigerian suffering in the streets' will get some extra cash to hold body.

You'v spoken well but this is just one part of the picture. Of what use is it, if banks drop their rate for me as an Indvidual. so I wll be enticed to come & borrow. What use? Here's why

- Importing is most likely, the busiess most smes are into, yet not favourable $1 = 240naira
& still rising

- Cost of running business via electricity is high
1litre = 150naira, nepa bills are CRAZZY with plans to Increase tariff soon!!!

- decreased patronage, Job cuts here & there, stories of unpaid salaries and stories of unwilligness to pay minimum wage. Who will then buy all goods, if the people are getting poorer and sacked?

- Lastly, Inflation is @ 9.3% and its bound to rise higher with falling gdp.

In essence, the lending rate can do very little to SME's. Other factors too need amendments.

Best move so far from Emefiele's CBN

but banks are broke and don't have money to lend or are they going g to print their own money.....think almighty TSA but banks are broke and don't have money to lend or are they going g to print their own money.....think almighty TSA

For Central Bank Nigeria to be Reducing Lending Rate to 11 Percent is one thing, if the borrowers will follow the principal of good lending then it will help improve the banking system...

https://www.creditpent.com/general-principles-good-lending-system-bankers-guide/

Naira Under A Freely Floating Rate System - The Naira has been the legal tender in the Nigeria's economic system for over three decades now, the naira just like the dollar as well as other currency has undergone different stages of transformation and modification, in the case of naira, it has not only been redesigned and re-modified, it has been devalued. However, on this article we will be discussing the free floating rate system under the naira, now let us appraise both the merits and demerits of the above conditions.