Mehr Iran Qarzol-Hasanah Bank (QMB) paid 2.3 million interest free loans to applicants during the last fiscal year (ended in March) -- accounting for 35% of all loans granted during the 12 years after its birth.
The lender now says it plans to increase loans to at least 3 million people in the current year, according to a report on QMB performance posted on its website.
QMB is a specialized Islamic bank that offers interest-free microcredit called Gharz Al-Hasanah loans.
Borrowers mainly are legal and individual entities in need of help for either welfare purposes or meeting short-term financial needs.
According to the bank’s public relations office, the lender has been successful in granting cheap loans to its clients since inception in 2007.
It has so far given 6.75 million loans to borrowers worth 575.74 trillion rials ($3.6 billion). The value of loans in the last fiscal year amounted to 221.44 trillion rials ($1.38 billion), almost 70% higher than the earlier year.
QMB says its financial resources have been piling on ascending order over the past three years. Its total resources stood around 300 trillion rials last fiscal year ($1.87 billion), up 76% compared with a year earlier.
The figure rose from 110 trillion rials in fiscal 2017-18 to 170 trillion rials in 2018-19, indicating 82% and 54% growth year-on-year.
It said increase in its financial resources in recent years was far above liquidity growth, which increased 30% annually.
Attracting Clients
Cheap loans provided by the QMB have attracted an increasing number of clients from all walks of life. More than 1.35 million new clients opened accounts during the last fiscal year bringing depositors to 8.5 million.
The figure rose from 5.5 million clients in the 2017-18 fiscal and 6.5 million accounts in 2018-19.
Given its usury-free mandate, QMB generates income from loan service fees at an annual rate of zero to four percent. With this income the bank covers its own expenses, wages and administrative and operational costs.
As per Central Bank of Iran’s rules, the Qarzol-Hasanah lenders (microcredit) should not charge borrowers fees higher than four percent.
