Economy, Business And Markets

Higher Marriage Loan Ceiling Impractical

Higher Marriage Loan Ceiling Impractical Higher Marriage Loan Ceiling Impractical

The Qarzol-Hasaneh Mehr Iran Bank (QMB) says the recently announced 100 million rial ($3,200) ceiling for marriage loans is unrealistic and impractical because it would be an onerous burden on the lenders.  

“Usury-free banking system obliges commercial banks to provide Qarzol-Hasaneh (microcredit) loans from their deposits. However, given the banks’ limited resources, raising the cap on marriage loans would in essence reduce  the number of couples who can borrow,” the bank’s CEO, Siamak Dolati was quoted as saying by Fars News Agency on Wednesday.

By virtue of Majlis approval, provision of the marriage loans (microcredit and interest-free) has become a priority for the banks. The Central Bank of Iran is responsible for obliging all lenders and credit institutions to allocate a part of their current account and savings deposits for the newly married.

“High interest rates offered by banks in recent years lured the people to park their money in more profitable accounts rather than the Qarzol-Hasaneh accounts. Banks are saddled with dwindling financial resources that in practice deny them the ability to accept Qarzol-Hasaneh applicants,” he said.

All the available Qarzol-Hasaneh saving accounts are focused on marriage loans, and if the demand for such credit increases banks will not be able to deliver, he added.

“A gradual increase in the ceiling of the marriage loans would have been much better.”