Banks gave 12,410.8 trillion rials ($45.5 billion) in loans in the first half of current fiscal year (March 21- Sept 22).
Compared to the corresponding period last year, lending rose by 4,551.9 trillion rials ($16.6b) or 57.9%, according to data published by the Central Bank of Iran.
The loans went to diverse sectors of the economy with the lion’s share to bolster working capital of businesses.
Businesses took out 8,376.7 trillion rials ($30.6b) in loans to boost working capital accounting for 67.5% of the total.
The CBI said the substantial rise in lending indicates lenders are giving importance to bolster working capital under the difficult environment for businesses across the board.
It also reflects lenders’ concerns about the viability and solvency of manufactures struggling due to the increasing economic challenges.
Mining and industrial firms were the main recipients of working capital loans worth 2,947.2 trillion rials ($10.7b), which accounted for 35.2% of the total working capital loans.
Mining and industrial businesses borrowed 3,727 trillion rials ($13.6b) in the six months. Working capital loans represented 79.1% of the total funds injected into the sector.
Apart from working capital, banks accepted loan requests from other quarters including for creating and expanding business, repairs/renovation and buying homes.
Banks gave 1,394.2 trillion rials ($5.1b) for setting up new businesses, 1,039.4 trillion rials ($3.8b) to expand businesses, 242.5 trillion rials ($888 million) for repairs and renovation, 727 trillion rials ($2.6b) for purchasing goods and 153.6 trillion rials ($562m) to homebuyers. Loans for miscellaneous purposes amounted to 476.7 trillion rials ($1.7b).
In terms of overall economic sectors, a big portion of money went to the services sector with 5,320.3 trillion rials ($19.4b).
The next major recipients were industries and mining sector (3,727 trillion rials) followed by commerce at 1,854.3 trillion rials ($6.7b).
As always, agriculture and housing were at the bottom end. Farmers borrowed 878.9 trillion rials ($3.2b) and people and businesses active in construction took out 627.7 trillion rials ($2.2b).
The CBI said despite the rise in lending effective measures need to be taken to curb the inflationary impact from the rising demand for goods.
Banks are expected to give priority to meet the financial needs of companies as the government struggles to save jobs, mitigate the detrimental impact of the pandemic, improve domestic production and cut imports.
Iran's banks injected almost 18,989.2 trillion rials ($70b) into the economy in the last fiscal year (ended March) -- up 9,239 trillion rials ($33.8b) or 94.8% compared to the year before.
