§ 9. Mr. Kenneth Lewisasked the Minister of Overseas Development whether 672 money lent to overseas countries under the aid programme, and which is then re-lent by the accepting country for contracts of one sort or another, has any restriction placed upon it by her Department on rate of interest charged to the contractor.
§ Mr. WhitakerWe normally require that the terms shall bear a reasonable relation to those which would apply to money borrowed within the country concerned for similar purposes.
§ Mr. LewisI am interested in the word "normal". I understand that a number of Governments are charging high interest rates to contractors whereas they have been loaned the money at low interest rates. This is an abuse, and cannot be helpful to our contractors working in those countries.
§ Mr. WhitakerWe favour the policy that I have outlined, because the use of the appropriate domestic lending rate avoids any distortion on the economy of the country. But each case has to be considered on its merits.