Economy, Business And Markets

Credit Card Scheme Launched

Credit Card Scheme Launched  Credit Card Scheme Launched

The long-awaited credit card scheme for purchasing domestic products at subsidized interest rates will be launched on Saturday, said the head of Central Bank of Iran IT Department, Nasser Hakimi.

The scheme is a part of government stimulus package, unveiled last October, which will provide credit card holders a maximum 100-million-rials ($3,000) at 12% for the purchase of domestically-manufactured goods like home appliances, furniture, carpet, ceramics and tiles. All applicants should be eligible for a payroll deduction.

“In its first phase, the scheme is offered only to newlyweds who have applied for marriage loans on the CBI website, to government employees and retirees with a minimum monthly income of 15 million rials ($500),” Hakimi was quoted as saying by Fars News Agency on Friday.

“As for employees and pensioners, they will receive credit cards with a credit four times their monthly salary,” he said, adding that newlyweds will receive the 100 million rials regardless of their income.

About 400,000 couples are waiting for marriage loans, making them eligible for the scheme along with 400,000-700,000 pensioners and government employees who can also use the cards.

Hakimi noted that the cards are valid for one year, but it is possible that the government might extend the expiry date.

CBI has pledged to finance the scheme with up to 42 trillion rials ($1.38 billion), in an attempt to stimulate demand for consumer goods and give some breathing space to domestic manufactures enlisted by the Ministry of Industries, Mines and Trade and saddle with excess inventories.

 Manufacturers’ Woes

The scheme is being launched as domestic home appliance manufacturers have been hit hard. The head of their union disclosed to FNA on Friday that some manufacturers in the beleaguered sector are on the brink of insolvency.

“Retail outlets selling home appliances have defaulted on 60% of their debt to manufacturers in recent months,” Mohammad Tahanpour said.  “Stores are chockfull of unsold goods.”

Tahanpour, however, is not optimistic that the scheme will be a success because the CBI hesitated with its launch over the past two months. “Banks are also reluctant to offer new loans as the fiscal year comes to a close (ends March 19), and this may postpone the launch of the plan until next year.”