A cut-rate ASB loan fund of $1billion aims at creating employment or avoiding job cuts, says chief executive Charles Pink. Photo / Laurene Boyd
ASB says it is setting up a new NZ$1 billion loan fund for New Zealand businesses to borrow at below market rates if they can show the loans will create employment, or prevent people losing their jobs.
The opening interest rate for the "Job Creation Loans" will be
5 per cent per annum, 0.95 per cent per annum below ASB's current two-year fixed housing rate, the bank said.
To be eligible for the loans, borrowers will need to meet ASB's normal business lending criteria plus demonstrate the employment benefits of their proposal.
"The focus of the lending pool is to assist businesses to take advantage of opportunities to create new jobs, or to prevent a business having to cut jobs," said bank chief executive Charles Pink.
"These loans will be going out at the lowest interest rates offered to businesses in recent times. It is our practical contribution to saving jobs in an unprecedented economic environment," Pink said.
Prime Minister John Key reacted quickly to news of the ASB loan, saying it was the "sort of creative private sector I have been seeking in the lead-up to this week's Jobs Summit."
"As I've said many times, the summit is not only about what the Government can do," he added.
"It will bring together people at the coalface of the economy who can make a real difference as we navigate these difficult economic times.
"In addition to policy ideas that the Government can look at and implement, I anticipate the summit will produce other innovative ideas that can help keep, and create, employment."
Readers of nzherald.co.nz did not enjoy the same sort of optimism as Key in the Jobs Summit, with a poll indicating 68% of people not confident it would achieve anything.
ASB also announced it would create a special job creation term deposit which would be priced at the same rate as the business loans.
-INTEREST.CO.NZ
