Commercial banks in Iran charge high interest rates on loans they award to exporters, according to the CEO of the Export Guarantee Fund of Iran, who complained that the high interest rates on export loans has made Iranian exporters unable to compete in global markets.
“While all around the world the governments provide exporters with loans at a Libor rate plus a maximum one or two percent, here the interest rate on export loans is as high as 33 percent,” Taher Shah-Hamed told MNA on Wednesday.
LIBOR -- London Interbank Offered Rate – is a rate of interest that most creditworthy international banks dealing in Eurodollars charge each other for large loans.
Describing exports as the engine for economic growth, Shah-Hamed said once it dominates the economy of a country, exports can definitely bring about sustainability and competitiveness to the manufacturing industries.
He said that the governments of some countries allocate a certain portion of their budgets to preferential rates for exports.
Shah-Hamed suggested that the government should pay more attention to exports as a solution to facilitate the implementation of its economic policy -- aimed to pull the economy out of recession without triggering a rise in inflation.
“The government can extend help to exporters by providing them with appropriate financing,” he added. Shah-Hamed said that as long as the EGFI guarantees exports, commercial banks will be encouraged to provide them with loans for conducting export-related activities.
Recently, the Ministry of Industry, Mine and Trade announced that it has compiled a report on the status and problems of exports in the small and medium industries.
A deputy industry minister said the report is to be submitted to the president in the near future.
Previously, Shah-Hamed had said that domestic manufacturers and exporters face numerous problems as a result of high interest rates being charged on export loans.
One such difficulty facing Iranian exporters, according to Shah-Hamed, was the lack of a line of credit payment (LOC).
