Soft loan

A Soft loan, also called soft loan is a loan with an interest rate that is lower than the fair market value. This form of financing is also called soft Financing. Often, low-interest loans with further concessions to the borrower are connected, such as long deferred payment or interest repayments. Low interest loans are usually issued by governments for projects that are deemed to be encouraged. The World Bank and other development institutions awarded low-interest loans to developing countries.

With the loan, interest rate, other considerations can be connected. One example is the loan of the Export-Import Bank of the People's Republic of China, issued in October 2004, a loan in the amount of two billion U.S. dollars for the construction of infrastructure in Angola. In turn, various off-shore were part of the Angolan government issued oil usage agreements of China.