soft loan

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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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

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.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
The main creditors include the World Bank -- 29.7% of all soft financing, Asian Development Bank -- 26%, Japan Bank for International Cooperation -- 13.6%, Russia -- 13.4% and IMF -- 7.8%.Non-privileged loans (multilateral and bilateral) constitute US$259.9 million or 10.4% in the structure of the public external debt.
"Qatar will probably be providing some soft financing to Bahrain" to help cover its share of the cost of the project, Ali said.
is a big boost to producers looking for soft financing that's closer to home.
In 2001, the IDB approved US$158 million in soft financing for the country in the areas of judiciary modernization, integrated child care, surface transportation, pension reform, forestry, municipal development, and pension reform.
Official Development Assistance is a valuable source of relatively soft financing for African states and private entrepreneurs.
Historically, even AECL reactor sales to overseas clients have been underwritten by soft financing and Canadian government loans to the purchaser, notes Ron Finch in his book Exporting Danger.
Aboul Fotouh pointed out that the financing will be granted within the scope of any of the bank's soft financing programs and easy and simplified procedures, ensuring the quality of service and decision-making speed through all the credit centres and branches of the bank throughout the republic.
Fakhoury said the memo would provide sustainable job opportunities for graduates through maximizing the use of the available and free governmental means related to specialized training programs, management of specialized projects, technical advisory and feasibility studies, and providing soft financing windows to enable them establish their own production projects.
AE sector also needs support from Alternative Energy Fund for setting up pilot projects, soft financing and R&D.
"The only way to make it up is through soft financing."
The minister said Jordan's backs any move by the World Bank and donor nations to expand soft financing to cover all parts of the world, including Jordan's which reels under enormous pressures arising from the refugee crisis.
Tawfiq said that the 12th edition of the event will provide an opportunity for small investors to purchase a small or medium sized business, with the provision of soft financing provided by the Social Fund for Development, which provides funding and guarantees.