Banks and credit institutions gave 22,946.1 trillion rials ($86.1 billion) in loans in the first ten months of current fiscal year that ends in March.
Compared to the corresponding period last year, lending rose by 8,552 trillion rials ($32.2b) or 59.4%, the Central Bank of Iran said Sunday.
Money went largely to boost working capital of businesses. Businesses took 15,205.7 trillion rials ($57.3b) to boost working capital accounting for 66.3% of the total.
The CBI said the jump in lending indicates banks are giving priority to sourcing working capital under the difficult business environment across the board.
It also reflects lenders’ concerns about the viability and solvency of manufactures struggling due to the increasing economic challenges.
Borrowers in the mining and industry sector were the main recipients of working capital loans with 5,502 trillion rials ($20.7b) accounting for 36.2% of the total working capital loans.
A big portion of the lending as usual went to the service sector with 9,588 trillion rials ($36.1b). The next major recipients were industries and mining 6,934.9 trillion rials ($25.6 billion) followed by trade at 3,518.4 trillion rials ($13.2b)
Mineral and industrial businesses borrowed 6,934 trillion rials ($26.1b) in the ten months. Working capital loans accounted for 79.3% of the total funding for this sector.
Apart from working capital, banks accepted loan requests for creating and expanding business, repairs/renovation and buying homes.
Banks gave 2,599.6 trillion rials ($9.8b) for setting up new businesses, 1,743.2 trillion rials ($6.5b) to expand businesses, 510.5 trillion rials ($1.9b) for repair and renovation, 1,597 trillion rials ($6b) for purchasing goods and 351.4 trillion rials ($1.3b) to first-time homebuyers. Miscellaneous loans amounted to 938.4 trillion rials ($3.5b).
A big portion of the lending as usual went to the service sector with 9,588 trillion rials ($36.1b). The next major recipients were industries and mining 6,934.9 trillion rials ($25.6 billion) followed by trade at 3,518.4 trillion rials ($13.2b).
Agriculture and housing were at the bottom end of the list. Farmers borrowed 1,644.5 trillion rials ($6.2b) and people and businesses in the key construction sector took out 1,251.9 trillion rials ($4.7b).
The CBI said despite the rise in lending measures need to be taken to curb the inflationary impact from the rising demand for goods.
Banks are expected to give higher priority to meeting financial needs of companies as the government struggles to save jobs, mitigate the destructive impact of the pandemic, improve domestic production and cut imports.
