8 Bank to Offer Cheap Loans for Rural Employment

Since the beginning of the current Iranian year (started March 21, 2017), the government has taken a few measures, including the “Comprehensive Employment Scheme”,  to promote entrepreneurship projects in small cities and rural areas through the allocation of cheap loans from banks’ resources, an official with the Ministry of Cooperatives, Labor and Social Welfare announced.

“Eight Iranian banks have so far been obligated to pay loans to applicants in the Comprehensive Employment Scheme while the government will cover a part of loans’ interests for the completed entrepreneurship projects,” Alaeddin Azvaji, director of the ministry’s Employment Development Office, was also quoted as saying by IBENA.

Ajvaji said government subsidies for loans’ interest rates range from 4.5% to 6.5% based on the type of the project and its location.

The official also said the National Development Fund of Iran–the country’ sovereign wealth fund–as another source of credit for boosting employment in rural areas and cities with a population of below 10,000, noting that loans coming from NDFI’s resources will have lower interest rates than the ones from Inclusive Employment Scheme offers.

“Based on the framework of the employment scheme, applicants in small cities with a population of less than 10,000 can receive the loans to meet their working capital needs while those in rural areas can also use the credits to start an entrepreneurial business,” he said.

Azvaji noted that the ceiling of loans for starting a new entrepreneurial project has been set at 20 billion rials ($465,100) while the maximum amount of credit for providing working capital needs is 5 billion rials ($116,200).

“The interest rate on working capital loans in cities with a population of less than 10,000 has been determined at 10% while the interest rate in remote rural areas and other villages does not exceed 4% and 6%, respectively,” he said.