Private Banks Lending Up 20%

The Central Bank of Iran’s monthly stats show the banking system’s total lending stood at 8.48 quadrillion rials ($215.5 billion at the market exchange rate) by November 20, with private banks and credit institutions accounting for 5.24 quadrillion rials ($133.3 billion) of the total.

CBI data show banks’ total lending grew by 16% compared with the start of the Iranian fiscal year (March 20), which growth is 20.3% for private banks during the eight-month period.

Three state-owned commercial banks recorded a 13.4% growth in their lending during the same period, while the growth for five state-owned specialized banks was recorded at 8.4%  

Bank Maskan (specialized in the housing sector), Export Development Bank of Iran (Iran's Eximbank), Bank of Mine and Industry, Cooperatives Development Bank and Bank Keshavarzi are the five specialized banks of Iran.

Murabaha contracts (Sharia-compliant installment loans)  accounted for 4.6% of the total loan contracts by November 20, up by 42.6% compared with March 20. Credit cards are also included in this category.

Interest-free loans accounted for about 5% of the total loans, marking an 11.5% growth during the period. These loans accounted for 8% of state-owned commercial banks’ portfolio by November 20.

Specialized banks paid the lion's share of their loans through Murabaha contracts. Partnership contracts, also known as Musharakah, accounted for 42.6% of paid loans, higher than any other Islamic contract types.

Direct investment accounted for 15 of lenders’ portfolio during the period. The share is 2% for the three state-owned commercial banks, namely Bank Melli Iran, Bank Sepah and Post Bank of Iran.