An estimated 190,000 newlyweds borrowed 255 trillion rials ($822 million) from banks since the beginning of the current fiscal year in March until June 21, the Central Bank of Iran said.
In numerical terms the borrowers were 8.5% higher and the value of loans up 71% y/y. Marriage loans are interest-free and should be repaid in seven years. Couples can apply maximum up to two years after the pronouncement of their marriage.
He steep rise marriage loans is linked to doubling the ceiling of loans. As per the fiscal budget, each partner who ties the knot can borrow 1.2 billion rials.
To help encourage early marriage, lenders are required to grant 1.5 billion rials per partner if the bride is below 23 years and the groom under 25.
According to CBI data, 90,000 applicants borrowed 36 trillion rials ($116 million) in childbirth loans since mid-April until now.
Banks and credit institutions were obliged in mid-April to give loans to the new parents to encourage childbirth. The loans are given to parents who had a child in the last fiscal year (March 2021-22).
First-time parents are eligible for 200 million rials in loans for the birth to their first child. They can apply for 400 million rials for the second child, 600 million rials for the third, 800 million rials for the fourth child and 1 billion rials for five children and more.
The measures are aimed at boosting Iran’s population growth amid a slowly ageing nation and backed by legislation with the relevant provisions envisioned in government budget.
Banks are obliged to lend in the form of Qarzol-Hassanah (interest-free microcredit) loans, amid concerns about the detrimental impact of mandatory lending on the financial structure of banks.
Senior bank and economic authorities have routinely censured the Majlis for imposing burdens and heavy obligations on banks beyond their ability and capacity.
The government initially had projected mandatory lending by banks at 6,000 trillion rials ($19.3 billion) in the current fiscal year ending March 2023. But MPs increased it to 13,000 trillion rials ($42b) apparently oblivious to the weak performance of banks most of which are already struggling with weak balance sheets.
