Almost 87 trillion rials ($328 million) was paid in security deposit loans for those renting homes since the beginning of the current fiscal year in March 2021, an official at the Central Bank of Iran said.
“The government instructed banks to allocate 100 trillion rials ($377m) in security deposit loans and the remaining 13 trillion rials ($49m) is under process," Shahrazad Daneshmandi, head of CBI credit department, was quoted as saying by bank's website.
Borrowers have applied for 234 trillion rials ($883 million), which is significantly higher than the ceiling. "We cannot lend above the set ceiling and thus many applications will be denied,” Daneshmandi said.
The interest-only security deposit loans worth 500 million rials ($1,900) in Tehran, 300 million rials ($1,132) in large cities with a population of over one million, namely Mashhad, Isfahan, Karaj, Shiraz, Tabriz, Qom, Ahvaz and Kermanshah, and 150 million rials ($566) in other cities is for tenants but the amount is paid to landlords, IRNA reported.
Those renting homes with an area less than 75 square meters in Tehran and 90 square meters in other cities are eligible for this type of loan. Newlyweds in the current year, breadwinning women, those who have not owned property (since March 2006) and households with five members as well as those supported by charities (such as the Imam Khomeini Relief Committee and the State Welfare Organization) are target groups of the security deposit loans excluding bachelors and the self-employed.
An official contract with a ‘valid tracking code’ is essential between the landlord and renter before the banks can lend.
Fixed-wage earners should present an employment verification letter from the employer to the banks and get the loan without the need for a guarantor.
"The government has set aside no money for the security deposit loans. Banks draw on their own resources for such needs," she said. "The CBI has reduced a part of banks' reserve requirement to enable them pay the loans.”
