More than 333,843 credit cards were used in the fourth month of the fiscal year that started in March -- a growth of 25% compared to the month before.
Iranians collectively made transactions with more than 124 million bankcards (including debit cards, gift cards and credit cards) during the month to July 21. This was 3.78% higher compared to the month before, Shaparak Company, the supervisory body of Iran payment network, reported.
Despite the rise, credit cards still account for less than one percent of the total bank cards used by Iranians, mostly limited to VIPs.
Debit cards are the most widely used and account for 95% of the total cards issued. Bank-issued gift cards are next with barely 4.79%.
State-owned lenders, Bank Melli Iran and Banks Sepah, accounted for the largest portion of active credit cards during the month, respectively issuing 60% and 13% of the total.
Bank Mellat and Post Bank Iran were next issuing 8% and 4.8%, repectively. Bank Saderat Iran was third with 4.6%.
However, the appeal of credit cards is expected to grow as banks reluctance to give microloans has left customers few options but to use credit. Private banks still have no interest in credit card business. As per Shaparak data, no credit card has been issued by at least 10 banks, mostly private lenders.
The Central Bank of Iran says it is working to institutionalize the use of credit cards as a resourceful and accessible alternative to microloans. Banks pay huge amounts in controversial loans to big businesses but small loans are few and far between accounting for a meager part of the total lending.
The growth in BMI's credit card share is largely related to its involvement in a scheme allowing owners of the so-called Justice Shares to use their shares as collateral for getting credit cards.
Since the beginning of the scheme, Bank Melli and Tejarat Bank have prepared the infrastructure for issuing credit cards
Justice Shares are shares of government-owned companies that were given free to the six lowest income deciles almost a decade ago.
An estimated 49 million Iranians own such shares. One goal of the credit card scheme is to help check volatility in the bourse by preventing oversupply of shares.
