The Dutch caretaker cabinet has earmarked two billion euros for the extension of a government programme providing banks with guarantees on business loans.

The programme was initially intended to expire at the end of 2010, but a spokesperson for the economic affairs ministry has confirmed it will be extended by another year. The government loan guarantees are intended to make banks less reluctant to extend credit to businesses. A government guarantee will reduce the bank's exposure, as the government will pay half the loan amount in case of a default. Economic Affairs Minister Maria van der Hoeven hopes extending the programme will allow entrepreneurs to stay in business even in economically difficult times. In 2009 and 2010, entrepreneurs made only limited use of the government scheme.

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