soft loan


Also found in: Dictionary, Wikipedia.
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 ?
The visit will include talks on strengthening political trust, augmenting bilateral trade turnover, investment, soft loan and non-refundable assistance, and facilitating traveling conditions for citizens within the framework of developing comprehensive partnership relations with 'third neighbor' the Republic of Korea.
He further said that soft loans are also being offered to nurses and other paramedics for establishing of their set-ups.
BP and its partner CNPC, which won the TSA to develop Rumaila, had already paid the MoO $500m as a recoverable soft loan.
India announced a $1 billion soft loan to build Nepal's infrastructure including power projects.
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.
With a mix of capital and a long-term soft loan the III Caseif fund, managed by Lafise Panama, will have $50 million for small and medium businesses who require funds to finance their operations.
Badawi pointed out that the KFAED's is a soft loan with 56.
The Green Soft Loan, an initiative of the Fund and the SME Bank, is a credit facility established to stimulate demand for the utilisation of green technologies mainly for communities living in rural areas but also accessible to urban clients.
The BOK's soft loan scheme is one of its main tools for financial inclusion to help smaller firms.
The CBT's soft loan growth targets also cap the growth funded by wholesale funds.
A year later, last month, Jordan asked the Japanese government for a soft loan to support the budget.