Overview

subsidized credit


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Credit provided on terms below normal market rates. Subsidized credit may be granted to encourage particular forms of activity, including, for example, exports, provision of affordable rented housing by housing associations, or the growth of entrepreneurship among minority groups. It may also be granted as a corrupt favour to people or firms with political influence. Credit may be subsidized by governments, or lending institutions may cross-subsidize some borrowers out of the profits on other loans.

Subjects: Economics.


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