Subsidy downsized

Central Bank cuts subsidy on interest rates of loans to productive sector

The Central Bank issued a decision amending the level of the subsidy applied to the interest rates on loans offered for industrial, tourism, and agricultural projects.

The new decision (10864) stated that loans extended after January 1, 2012 would receive a 4.5 percent subsidy on their interest rates. The decision, however, kept the subsidy on interest rates on loans approved before January 1, 2012 unchanged.

Prior to this amendment, the Central Bank had been offering a variable subsidy of the interest rates depending on the size of the loan. A subsidy of seven percent was applied to the interest on the first portion of the loan, up to LL5 billion ($3.3 million). A subsidy of five percent was applied to the interest on the second portion of the loan, between LL5 billion and LL15 billion ($10 million).