Types of Public debts
- Internal debt. This is the debt contracted from within the country e.g. selling government securities to the public by the government, borrowing from the central bank
- External debt. This is the debt contracted from sources outside the country. For example borrowing from friendly countries and multinational organizations like IMF and World
- Reproductive (Self-liquidating debt). This is the debt contracted whereby the money received is used to set up productive ventures which generate more incomes that can be used to repay the debt. For example a loan for constructing an industry, a dam
- Dead Weight (Unproductive) debt. This is the debt contracted to finance activities which are not used to generate more incomes. For example loans for financing a war, buying consumer goods, wages for workers
- Funded debt. This is a long-term debt where the date of paying back is not known by the
- Unfunded (Redeemable) debt. This is debt where the date of paying back the loan is clearly known by the
- Floating (Marketable) debt. This is a form of unfunded debt contracted by government through the sale of government securities to the For example treasury bills and bonds.
- Concessional Loan (Soft loan). This is a loan extended to the borrower at a very low interest rate with a long redemption
- Hard loan. This is a loan extended to the borrower at a very high interest rate with a short redemption
CATEGORIES Economics
TAGS Dr. Bbosa Science
