Changing
Cuba
 |
| People queued outside some banks in Havana to find out how to apply for loans. |
Banks in
Cuba have begun offering loans to individual citizens, in the latest
free-market reform in the communist-run island.
The loans
are aimed at the growing number of small businesses and the self-employed, as
well as farmers and people building their own homes.
It is not
clear what interest rates or other conditions will apply.
Over the
past year Cuba's government has implemented a series of reforms designed to
boost private enterprise.
Around 500
banks across the island will offer loans, according to the official Communist
Party newspaper Granma.
Officials
will assess each application on the basis of what the loan is to be used for
and how it will be repaid, the paper said.
Potential borrowers
should find out if their applications have been approved within 20 days.
Interest
rates will depend on the length of the loan and will be within a range set by
Cuba's Central Bank.
The minimum
loan for the self-employed will be around $125 (£80), while for farmers it will
be around $40 (£25).
Cubans will
also be able to open current accounts and use cheques, debit cards and bank
transfers to make payments.
Radical
change
The banking
reform is the latest in a series of measures introduced by President Raul
Castro in an effort to revive Cuba's struggling socialist economy by boosting
private enterprise.
Large
numbers of state employees have been made redundant and encouraged instead to
set up as self-employed.
Over the
past 18 months, rules restricting private business have been relaxed and people
are now allowed to buy and sell property and cars.
The reforms
represent a dramatic change in Cuba, which for nearly half a century was been
run as a command economy, with almost all activity controlled by the state.
President
Castro says the changes represent an effort to update rather than abandon the
socialist model.
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