<p>Despite deregulation of the financial markets such as liberalization of foreign bank entry and branching, the government continues to directly intervene in the credit markets through several special credit programs.</p>
<p>In the effort to restructure the economy, the government has availed the assistance of multilateral lending institutions, which had required the pursuit of a number of credit programs, which is commonly known as policy-based lending programs.</p>
<p>This paper reviews and examines its special features, its policy conditionality and its impact on various players in credit markets.</p>