What is a Discount Loan?

Concessional loans are loans that are provided by the central bank or commercial bank to borrowers in terms of conditions and interest rates in accordance with national policies or the needs of their own interests. In China it generally means low-interest loans. The current preferential loans of Chinese banks include the following two meanings: The preferential interest rate is lower than the benchmark interest rate set by the Central Bank. Carry out national economic development policies in different periods, and give priority to loans for a certain production sector, industry or project. According to national policies, low-interest preferential treatment is given to certain production and construction projects that require development and low returns, or specific loan projects that need to be supported due to poor natural conditions and economic backwardness. in accordance with. Concessional loans have important functions: timely support for industries and products that the country needs to focus on; implement socialist economic development policies; play an active role in invigorating the circulation and prosperity of the economy; support and promote the economic development of the poor, the poor, the old, the poor; Loans are the flexible use of credit and interest rate levers, which play a role in timely support and supporting the advantages and disadvantages of specific loan projects arising from the reform of the economic system. The current types and types of preferential loans in the financial system of the country are: 18 loans for civilian trade and civilian product production loans, grain and oil loans, technology development loans, gold equipment loans, and collective handicraft loans in ethnic regions. ^[1]

Concessional loan

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Concessional loans are loans that are provided by the central bank or commercial bank to borrowers in terms of conditions and interest rates in accordance with national policies or the needs of their own interests. In China it generally means low-interest loans. The current preferential loans of Chinese banks include the following two meanings: The preferential interest rate is lower than the benchmark interest rate set by the Central Bank. Carry out national economic development policies in different periods, and give priority to loans for a certain production sector, industry or project. According to national policies, low-interest preferential treatment is given to certain production and construction projects that require development and low returns, or specific loan projects that need to be supported due to poor natural conditions and economic backwardness. This is a preferential loan issue. in accordance with. Concessional loans have important functions: timely support for industries and products that the country needs to focus on; implement socialist economic development policies; play an active role in invigorating the circulation and prosperity of the economy; support and promote the economic development of the poor, the poor, the old, the poor; Loans are the flexible use of credit and interest rate levers, which play a role in timely support and supporting the advantages and disadvantages of specific loan projects arising from the reform of the economic system. The current types and types of preferential loans in the financial system of the country are: 18 loans for civilian trade and civilian product production loans, grain and oil loans, technology development loans, gold equipment loans, and collective handicraft loans in ethnic regions. ^[1]

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The main basis for banks to issue preferential loans is: according to national policies, low-interest loans are given to certain production and construction projects that require urgent development and low returns, or specific loan projects that need to be assisted due to poor natural conditions and economic backwardness Discounted care. By granting preferential loans, we can support the industries and products that the country needs to focus on; it can prosper the economy and invigorate circulation; it can support and promote the economic development of the old, young, border, and poor areas; To timely support and help the advantages and disadvantages. With the deepening of the financial system reform, banks must make necessary adjustments to the types and scope of disbursement of preferential loans. At present, technology development loans still exist. 18 preferential loans such as loans for production of civilian products, loans for grain and oil, loans for gold equipment, etc. ^[2]