Banks and credit institutions paid loans worth 7,010 trillion rials ($26.9 billion) in the first four months of current fiscal year (March 21-July 21).
Lending increased by 2500.9 trillion rials ($9.6b) compared to the corresponding period last year up 55.6%.
As usual, loans paid for boosting working capital of businesses topped the list according to a report published by the Central Bank of Iran.
Total lending to boost working capital was 4,794 trillion rials ($18.4b) accounting for 68.4% of the total. As always mining and industries sector were the main recipients of working capital loans with 1717.7 trillion rials ($6.6b) or 35.8% of the total working capital loans to all sectors.
The CBI said the substantial rise in lending indicates lenders are focused on supporting businesses in need of working capital under the difficult economic environment worsened by the brutal coronavirus pandemic.
It also reflects lenders’ concerns about the viability and solvency of manufactures struggling to stay afloat.
Apart from working capital, loans were given to creating and expanding business, repairs/renovation and buying homes.
Banks gave 779.4 trillion rials ($3b) for setting up new businesses, 538.9 trillion rials ($2b) to expand businesses, 114.4 trillion rials ($440 million) for repair and renovation, 438 trillion rials ($1.7b) for purchasing goods and 82.6 trillion rials ($317m) to first-time homebuyers. Miscellaneous loans amounted to 262.2 trillion rials ($1b).
In terms of overall economic sectors, a big portion of the loans and credits went to the services sector with 2,902.3 trillion rials ($11.16b) or 41% of the total.
The next major borrowers were industries and mining (2,155 trillion rials) followed by commerce at 1,158 trillion rials ($4.4b).
As often, agriculture and housing were at the bottom end. Farmers took out loans worth 466 trillion rials ($1.8b) and borrowers in housing and construction sector 327 trillion rials ($1.25b).
The CBI said despite the rise in lending measures need to be taken to curb the inflationary impact from the pattern of rising demand for goods.
Addressing the financial needs of Covid-battered companies is a priority of banks as the government struggles to save jobs, mitigate the colossal damage from Covid-19, improve domestic production and reduce imports.
Iran's banks injected more than 18,989.2 trillion rials ($73b) into the economy in the fiscal year that ended in March -- up 9,239.3 trillion rials ($35.5b) or 94.8% compared to the year before.
