Economy, Business And Markets

SMEs to Receive 7.5% of Banking Credits

SMEs to Receive 7.5% of Banking CreditsSMEs to Receive 7.5% of Banking Credits

According to Iranian banking system’s projections for the fiscal year to March 20, 2018, small- and medium-sized enterprises will receive up to 500 trillion rials ($) worth of loans, which account for 7.5% of the value of all loans earmarked for economic sectors during the year.

Governor of the Central Bank of Iran Valiollah Seif made the announcement during a coordination meeting for implementing the banking system’s plan to boost production, which was also attended by the Minister of Industries, Mining and Trade Mohammad Shariatmadari and CEOs of major banks, CBI’s official website reported.

“The highest priority for our banking system in the current fiscal year is to provide working capital for 10,000 businesses, finance 6,000 unfinished projects with a physical progress of at least 60% and support the renovation of 5,000 economic enterprises by allocating 300 trillion rials ($7.4 billion) worth of loans from the internal resources of the banks,” he added.

The loans are part of a government plan to help SMEs deal with the deep recession they have been grappling with for the past few years.

During the meeting, the CBI chief noted that according to the current annual budget, 200 trillion rials ($4.93 billion) worth of loans have been earmarked by the banking system to create jobs, especially in rural and distressed areas.

“Fortunately, as the Ministry of Industries, Mining and Trade has a good understanding of the situation of banks and economy, the resources are mostly going to target sectors that will directly boost production,” he said.

However, Seif noted that the banking system will not ignore any risks in allotting credits to SMEs during the plan and loans will only be allocated to projects that are economically feasible.

Some 96% of all licensed Iranian businesses are considered small- and medium-sized. About 88,000 manufacturing units are active in 992 industrial parks across Iran, accounting for 42% of all employment in the industrial sector.

Minister of Industries, Mining and Trade Mohammad Shariatmadari praised the banking system for boosting production and supporting small- and medium-sized enterprises.

“If it was not for banking support, many production units would have shut down and their workers would have been unemployed,” he added.

Shariatmadari noted that providing working capital to production units is a challenging issue successfully managed by banks while there are special plans to resolve other issues pertaining to industries and production. 

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