Banks paid an estimated 44,485 trillion rials ($84.89 billion) in loans in fiscal March 2022-23 -- up 45.3% on the year before.
The Central Bank of Iran said on its website that individual borrowers accounted for 6,859 trillion rials ($13 billion) or 15.4% of the loans. The money was paid to 8.9 million applicants while the major part ($71.8b) went to businesses.
Loans to individuals increased by 55% y/y and to companies was 43.8% higher.
Regarding the share of economic sectors, the CBI data shows the industrial and mining sector borrowed 37.7% of the total. Services sector topped the list taking 39.9%.
Most loans to businesses were to help them meet their need for working capital (72.9%). Nearly 19.4% of the total went for starting businesses while expanding businesses was the purpose of 5.3% of the loans.
Nearly 44% of individuals borrowed money to buy goods last year. Marriage loans, emergency interest-free loans and mortgages were the other types of borrowing by individuals.
CBI data also showed that 71% of payments to industrial and mining businesses was working capital loans. In the last fiscal year (ended March 20), banks gave 1,690 trillion rials ($3.3 billion) in social assistance loans to 1.94 million low-income applicants largely for youth marriage, childbirth and to those wanting to rent a home.
According to the CBI public relations department, banks accepted 824,900 applications for childbirth loan worth 330 trillion rials ($647.5 million).
Some 1,230 trillion rials ($2.4 billion) were marriage loans to 896,000 applicants, up 55% y/y. Marriage loans are interest-free repayable in seven years. Couples can apply up to two years after the pronouncement of their marriage.
Banks gave security deposit loans worth 130 trillion rials ($254.9m) to 224,460 applicants wanting to lease a dwelling place.
Security deposit loans were announced by the government in 2020 in the framework of the coronavirus aid package for the large numbers unable to rent a home due to the unprecedented increase in rents and home prices.
Banks are obliged to lend in the form of as Qarzol-Hassanah schemes (interest-free microcredit) despite mounting concern about the detrimental impact on the already troubled and often-censured banking industry.
The subsidized social support loans has undermined their already overstretched resources and pushed many in a precarious condition.
Prominent economists and senior bankers have censured policy and decision-makers for imposing such obligations on banks to keep lending beyond their ability and capacity.
In fiscal 2023-24 banks were ordered to allocate up to 2,000 trillion rials ($4.92 billion) in interest-free lending for government-led programs like loans to newlyweds, for childbirth and to support households struggling with the worsening cost-of-living crisis.
The Majlis Social Commission last year raised the ceiling for marriage loans. Debating the new budget, lawmakers decided to increase the loan by at least 25%. If it becomes law, the amount will increase from the present 1.2 billion rials to 1.5 billion rials per couple, said Vahid Yaminpour, deputy minister of sports and youth affairs, dolat.ir reported.
The loans will increase to 4 billion rials per couple if the bride is below 23 old and the groom under 25, he said.
