Collateral-Free Loan Subject to Eligibility

An official at the Economy Ministry said the new collateral-free lending program is not all-inclusive.
Abbas Hosseini, the ministry’s deputy for banking, insurance and state-run companies, said the new microloan scheme is available only to those that are eligible.
Earlier, the ministry instructed all banks to lend to salaried employees and pensioners without demanding collateral or guarantors.
“Eliminating guarantors means replacing them with a credibility assessing system. It is not that all wage earners are eligible and can apply,” Hosseini was quoted as saying by the ministry’s news website, shada.ir.  
His explanation came following reports that people had rushed to the banks demanding loans soon after the ministry announced the plan for collateral-free loans.
Earlier in the week, Ehsan Khandouzi, the minister, ordered all banks to accept the collateral-free microloan request. He issued the instruction in a letter to the CEOs of 13 state-owned banks and also asked inspection departments of banks to visit branches to make sure that banks complied.
As per the new rule, retirees and salaried workers can borrow up to 1 billion rials without the need for collateral.  
Instead of collateral, employees should present their salary certificate for loans of up to 500,000 million rials. For loans above that amount they need to submit a check or promissory note.
Hosseini said salaried employees with good credit rating can use the collateral-free financial facilities.
Despite the economy ministry’s emphasis on credibility assessment for loans, there is no clear-cut criteria for apprising borrowers.
Earlier the Central Bank of Iran said the basis for credibility assessment will vary and can include a broad range of factors concerning borrowers’ financial performance, including the value and record of previous loans, the applicants’ check transaction records and even their behavior vis-à-vis paying traffic fines and utility bills.
Under the credibility assessment plan, banks will limit access of deadbeat customers even if they put up enough collateral but failed to settle their debt in a timely manner in the past.
The regulator has devised a platform for online inquiries on their credibility at mycredit.ir website. The platform has data on 44 million Iranian ID cardholders, namely the credibility status of 34 million bank customers.