Support to production loans downsized

Ministry of Finance cuts subsidy on loans to productive sectors to 4.5 percent

The Minister of Finance Mohamad Safadi said that the ceiling of the subsidy on loans extended to the productive sectors will be reduced from seven to 4.5 percent. “This (measure) is logical within the current global financial situation,” said Safadi.

The subsidy program was established in 1997. It consists of a five to seven percent subsidy on the interest for loans extended in foreign currencies to productive sectors.

The amount of subsidized interest loans to productive sectors reached $482 million in the first half of 2011, according to the Central Bank figures. The industrial sector accounted for almost 50 percent of the total, followed by tourism with around 40 percent. The cumulative amount of subsidized interest loans to productive sectors reached four billion dollars between 1997 and June 2011.

Safadi also said that the government will establish a Higher Commission for Managing Public Debt. He said that the government has embarked on a set of reforms in the directorates of the MoF, the Customs, and the Cadastre (Real Estate directorate).