soft loan

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Related to soft loan: Hard Loan

Soft Loan

A loan made at no interest or at a below market interest rate. Soft loans usually refer to loans made to developing countries and others in need of financing, but without the ability to borrow at the market rate. Soft loans may also have a longer grace period or a different amortization schedule that makes repayment easier. This is also called soft financing.

soft loan

a LOAN that bears an INTEREST RATE charge which is much lower than the market rate of interest for such loans. Soft loans are made available by the government to encourage investment in particular types of industrial activity or in particular regions, and by international organizations such as the INTERNATIONAL MONETARY FUND and WORLD BANK to help countries with balance-of-payments difficulties, provide economic aid and to assist industrial development. See INDUSTRIAL POLICY, REGIONAL POLICY.

soft loan

a LOAN that bears an INTEREST RATE charge substantially below that of the interest rate that is charged normally on a loan for a similar purpose and risk status.

Soft loans are often given as a form of ECONOMIC AID to DEVELOPING COUNTRIES by developed countries and international institutions (see WORLD BANK) and are used as a form of EXPORT SUBSIDY. In addition, soft loans may be used to influence industrial location under a country's REGIONAL POLICY.

References in periodicals archive ?
These agreements come as part of Jordan's efforts, led by His Majesty King Abdullah II, to increase support to Jordan, either through grants or through increasing the Kingdom's ability to take advantage of international soft loans.
As soft loans, the funding will be available on request for the next three years.
BP and its partner CNPC, which won the TSA to develop Iraq's largest producing oilfield Rumaila, had already paid the MoO $500m as a recoverable soft loan.
JICA's soft loan is with a grace period of ten years and a repayment period of 40 years, at an interest rate of 0.
SANA'A, March 03 (Saba) - General Manager of the soft loans department in the Export-Import Bank of China Bank (China Exim Bank) arrived in Sana'a on Monday on an official visit to the country for several days.
Apart from the soft loans, the Fund will also be offering Green Concessional Loans to provide incentives to businesses to reduce their impact on the environment by adopting eco-friendly practices and operations.
A year later, last month, Jordan asked the Japanese government for a soft loan to support the budget.
Summary: Egypt signed a soft loan from the African Development Bank worth $550 million on Monday to finance a 650 megawatt power station in the city of Suez, the government said.
BAGHDAD / Aswat al-Iraq: The Iraqi Electricity Ministry has announced on Saturdy the arrival In Iraq of the 2nd shipment of electrical appliances, sent by the Japanese Toyota Company, being part of the Japanese Soft Loan for Iraq.
8m soft loan will finance part of the 220kV and 66kV transmission grid.
The introduction of adequately resourced soft loan finance could make a positive contribution to business numbers, as the viability of both existing businesses and start-ups would improve.
Saudi Arabia has granted Pakistan a $380 million soft loan to mainly support its budget, in the biggest single donation since donors pledged $5.