68029
$2.6b Business Loans Ready
$2.6b Business Loans Ready

$2.6b Business Loans Ready

$2.6b Business Loans Ready

Lenders in all provinces have been notified of the plan for paying 100 trillion rials ($2.66 billion) worth of loans aimed at renovating and rebuilding production units, the deputy industries, mining and trade minister has announced.
“These loans also include foreign exchange credits, which we are trying to provide through the National Development Fund of Iran and allocate them to production units,” Reza Rahmani was also quoted as saying by Banker.ir.
The amount has been provided from the resources of the Central Bank of Iran.
The Ministry of Industries, Mining and Trade had proposed the idea of allocating loans to production units for sustaining production, maintaining the current employment rate, generating new jobs and boosting the country’s economic growth.
It has been decreed that 10,000 businesses and 6,000 unfinished projects with a physical progress of at least 60% will receive funds while 5,000 business units will be renovated.
According to CBI, in order to achieve this goal, 300 trillion rials ($8 billion) are to be allocated by the banking system, 200 trillion rials ($5.33 billion) of which “will be for working capital needs and financing unfinished projects” with the remaining 100 trillion rials ($2.66 billion) for “rebuilding and renovating business units that meet technical, financial and economic justifications”.
Rahmani noted that big industrial units will not be the only beneficiaries of these loans but the share of small- and medium-sized enterprises has also been considered.
The official hoped that these loans would foster production, engender job opportunities and increase the competitiveness of Iranian commodities against foreign brands.
“Production units are prioritized based on a number of factors. For instance, those with a high level of energy consumption and pollution are first in line to get renovation loans, but the provincial industries and mining organizations will determine the eligible units,” he said.  
Supporting the ailing SMEs was one of the top priorities of the Iranian banking sector in the previous fiscal year, which goal was achieved after the allocation of 170 trillion rials ($4.53 billion) more than the initially designated 160 trillion rials ($4.26 billion) to SMEs in line with President Hassan Rouhani’s focus on boosting production and employment.  

 Capital Needs
Due to the significant role of industries and mining sector in employment, production and export and since the banking system almost solely shoulders the financing of the sector, Minister of Industries, Mining and Trade Mohammad Reza Nematzadeh has asked the government and parliament to further recapitalize the banks.   
“The government has not allocated any budget for the development of industries and mining for years and the private sector financed their business through bank loans and their own resources,” Nematzadeh also said in a television interview on Saturday.
The minister noted that the government should have invested in the sector in line with the inflation rate but that did not happen for the past 12 years.
However, last year, the parliament approved to increase the capital of state-owned banks through the resources generated from the revaluation of foreign exchange assets.
“The capital of Bank of Industry and Mine and Bank Maskan increased by 20 trillion rials ($533 million) and 100 trillion rials ($2.66 billion), respectively, benefiting from the aforementioned resources that boosted their lending power,” he said.
Nematzadeh said Iranian banks are trying to support industries and the private sector, but their resources are very limited.
“We used to benefit from foreign banks’ finances via our own banks but unfortunately those relations stopped due to the nuclear sanctions,” he said.
Since the removal of international banking restrictions in January, Tehran has secured links with only a limited number of smaller banks as US sanctions remain in force and large foreign institutions still fear potential fines.

 Pressed for Resources
Nematzadeh noted that the economy has improved in the past few years but the banks have remained small and there is no balance between the demand of the economy and banks’ resources.
He stressed that private banks are also lacking resources and hoped that they would increase their lending power through joint investments with foreign banks and encourage their shareholders and depositors to enlarge their investments.
Hussein Qazavi, a deputy economy minister, said the government should increase the capital of development banks every year since they do not tend to absorb any notable deposits as they do not seek profitability, therefore the government should meet their financial needs so they are able to play their developmental role.
“Multinational development banks like Islamic Development Bank, International Monetary Fund, World Bank and Black Sea Trade and Development Bank all have considered recapitalization every five years in their statutes,” he said.
Qazavi hoped that the government would allocate enough resources to specialized and development banks, especially BIM, to ensure that the bank will have enough capital to effectively perform its national duty.

Short URL : https://goo.gl/nVbGH5
  1. https://goo.gl/Q1y9M3
  • https://goo.gl/UsxW8d
  • https://goo.gl/qb5m1t
  • https://goo.gl/LPgCxZ
  • https://goo.gl/Mie6aK

You can also read ...

 TCCIMA Secretary-General Bahman Eshqi speaking in Vienna on Nov.16
Iranian banks are expected to open their first branches in...
Iran has 9,000 online retail stores.
With the ever-growing developments in the World Wide Web,...
Helping the Quake-Stricken?  Not If They Are Iranians!
Iran is a hotspot of earthquakes and several of them have...
Tehran-Accra Expand Agro Coop.
Three memoranda of understanding were signed between Iran’s...
USD at  41,000 Rials
After the US dollar’s recent bull run that pushed the value of...
Wide-Ranging MoU With Mexico
A memorandum of understanding on agriculture and rural...
Tesla Roadster Speeds in Front of Electric Truck
Tesla Inc upstaged its own debut of an electric heavy duty...
The first Iran-Luxembourg Forum opened on Wednesday and hosted...

Add new comment

Read our comment policy before posting your viewpoints

Image CAPTCHA
Enter the characters shown in the image.

Trending

Googleplus