Chinese Government Helps Earthquake Victims With Loans

Mon, 02 Jun 2008

China’s bank regulator has announced that millions of dollars of loans are to be written off in the effort to help disaster victims. Any losses suffered by borrowers that aren’t covered by insurance will be regarded as bad loans and written off in a bid to reduce the debt burden on the areas worst affected by the earthquake.

With an estimated 80,000 people killed by the earthquake, and another 5.47 million people homeless, banks have been ordered to write off the bad credit card debt loans of people left missing or dead as a result of the earthquake and have no assets to pay back the loans. The exact amount to be written off remains unknown, though the Agricultural Bank of China estimated the bad loans would total around £430 million.

It is the latest in a series of measures taken by the government to help the country’s financial climate in the wake of the disaster. Chinese banks have already been ordered to open credit lines of £6 billion and extend loans worth £470 million for relief and reconstruction. £180 million has been allocated in personal allowances to the victims of the earthquake, whilst bank borrowers have been given loan extensions and tax breaks.
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