An estimated 5,140 small and medium-sized companies took out loans from banks in the last calendar year that ended in March.
According to the Ministry of Industry, Mining and Trade, which is in charge of introducing the SMEs to banks, they collectively received 240.3 trillion rials ($849 million) in loans, IBENA reported.
Loans were also given to ‘unestablished business projects’ that had made at least 60% physical progress.
As per the ministry data, more than 17,150 SMEs had applied for loans but 9,500 firms were introduced to the lenders.
Data showed 13% annual growth in the number of applicants and 7.3% increase in the number of okayed loans from the year before.
Companies with 50 workers or less, and 100 workers or less are considered SMEs. According to the Iran Small Industries and Industrial Parks Organization, Iran is home to 80,000 registered SMEs.
In April, the Central Bank of Iran sent instructions to lenders updating support policies for small and medium-sized enterprises.
As per CBI rules, lending priority must be given to SMEs introduced by special provincial task forces provided that they are financially and technically viable and can ensure sustainable employment.
The next priority is for SMEs whose goods are in demand in the domestic market and have less possibility of getting stuck in warehouses.
Firms with downed shutters or operating at half capacity are third on the eligibility list for loans and the bank must first determine that that their condition is due to lack of funds.
Banks can also lend to businesses that have remained dormant for long and can be revived with fresh cash injections.
Money can go to enterprises that are creditors of state and executive organizations and companies and the government was unable to pay.
SMEs play an important role in the Iranian economy. They outnumber large firms, employ more people and are generally entrepreneurial and innovative. Reports say SMEs constitute 92% of the 85,000 manufacturing enterprises.
Policymakers see SMEs as crucial through which knowledge-based sustainable development can be achieved and are hopeful that the funds given to them will improve their role in production and employment.
Many people in emerging economies look for work in small- and medium-sized enterprises. SMEs contribute roughly 45% of total employment and 33% of GDP in these countries, according to the Organization for Economic Cooperation and Development.
