Subsidised loan

These are loans with interest rates below the market rate that are usually offered for a specific activity or project.

Borrowing in the form of a subsidised loan usually entails the involvement of an additional company, typically a public one, apart from the bank

The public body involved usually lays down the eligibility conditions for the loans and subsidises the interest rate, whereas the lender studies the viability of loans, manages lending and takes the risk in the event of  default.

As with any other loan, the borrowed amount must be repaid within the agreed period of time along with the interest.

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