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 ?
Soft loans worth Rs100 billion will be given to 500,000 youths
He said that the soft loan would also be provided to children, orphans,
Mr Ouko in his report says there were also no debtors' ledgers detailing loans issued since inception and repayments made over the years on account of any loans recovery.Majority of the groups that received soft loans from the government's Sh5 billion Uwezo Fund to promote their enterprises have defaulted on paying back the amounts within stipulated time, the government earlier said.
The assurance was given by the State government which promised to provide the soft loans without interest as soon as the Corps members indicated interest for such in its efforts to make them self employed and employers of labour at the end of their service years.
Under the start-up programme, soft loans will be given to young persons to establish small businesses.
BEIRUT: The International Finance Corporation is willing to provide Lebanon with $1 billion in investments and soft loans each year if the government starts executing fiscal reforms and allows the private sector take part in projects, an IFC official said Sunday.
The increase will enable NSB to properly fulfill its mission which includes offering soft loans, said Wali, who is also the chairman of NSB.
Mentri Besar Datuk Seri Mukhriz Tun Dr Mahathir said it included providing soft loans through low interest rate of less than 1 per cent with the repayment period extended to 35 years.
'You're going to use some Chinese soft loans to finance some infrastructure projects.
He further said that soft loans are also being offered to nurses and other paramedics for establishing of their set-ups.
On April 15, 2010, the MoO had sent to the central cabinet a proposal worked out by Ameedi's directorate to convert recoverable five-year soft loans from IOCs developing two of the country's giant oilfields into un-recoverable signature bonuses.