Business And Markets

Hemmati Announces Loan Scheme for Businesses Hit by Coronavirus

Hemmati Announces Loan Scheme for Businesses Hit by Coronavirus
Hemmati Announces Loan Scheme for Businesses Hit by Coronavirus

The governor of the Central Bank of Iran on Wednesday outlined financial aid to help mitigate economic losses arising from coronavirus outbreak. 
Speaking on the sidelines of a Cabinet meeting with business leaders, Abdolnasser Hemmati said banks will lend to four million businesspeople affected by the infectious disease. 
He did not elaborate on the amount of loans but stressed that interest rates would be minimum.  
“Interest is 12%, but the government will pay 8% and the borrowers 4%,” he was quoted as saying by IRNA. 
Reiterating CBI’s readiness to support lenders, the senior banker said there are plans to offer financial aid to the Social Security Organization to enable it ease its strict deadlines on employers for paying their monthly share of social and medical insurance premium. 
On banking measures to contain the spread of the deadly virus, he said the regulator has increased the daily ceiling of withdrawal from ATMs to 5 million rials per day compared to previously 2 million rials. 
In addition, the daily cap for card-to-card transfer has been increased from the previous 30 million rials to 100 million rials. 
Moreover, banks have been told to curtail operations and take effective precautionary hygiene measures to protect staff and customers from the infectious disease aka COVID-19. 



Eligible Businesses 

Enumerating categories eligible for financial relief, Hemmati said ten business groups unable to meet their financial commitments as result of the virus will, among other things, be given a three-month grace period to repay their debts. 
Borrowers have also been exempt from paying monthly loan installments for up to three months starting from late March to April 21.
Borrowers obliged to clear their debts lump sum have also been given a grace period of three months. 
CBI named businesses that are covered by the government financial assistance:
1) Food distributors, such as restaurants, reception halls, coffee shops, buffets, fast foods etc
2) businesses active in tourism and hospitality sector, such hotels, self-catering apartments, boarding houses etc
3) transport companies,  including air, road, rail and sea transport
4) apparel manufacturers and distributors
5) leather and footwear 
6) confectionaries and shops selling dried fruits 
7) gyms and recreational centers
8) educational and cultural centers
9) craftsmen and handicraft shops 
Iran confirmed 14,000 corona cases until Wednesday with the death toll rising to 724. Health officials said 4,790 patients had recovered and went home. 
The pandemic has hit the hospitality and tourism industry hard as hotels, tour operators, airlines and travel companies report cancellations on a scale unseen in recent history.
The infection is also taking a toll on restaurants and food businesses. Many companies have been forced to cut workforce, scale-down production or completely shut down.
Representatives of private sector businesses last week wrote to President Hassan Rouhani asking his government announce stimulus packages to protect businesses, especially SMEs against financial loss posed by the coronavirus that has hit at least 120 countries.   

Add new comment

Read our comment policy before posting your viewpoints