Interest-Free Loans to Help Create Jobs

The Central Bank of Iran is obligated to allocate interest-free loans to socially vulnerable people covered by two main charity organizations, announced the head of Majlis Joint Committee for the sixth five-year development plan (2016-21).

“The central bank has been ordered to allocate 100,000 counts of Qarzol-Hassaneh (interest-free microcredit) loans to individuals who are under the coverage of Imam Khomeini Relief Committee and State Welfare Organization of Iran to help create jobs,” Hamid Reza Haji-Babaie was also quoted as saying by Banker.ir.

Haji-Babaie announced that according to a measure approved by the parliament, the allowance of families covered by the two aforementioned organizations will experience a 250% increase starting from the next fiscal year that begins in March.

“Currently, the average sum of allowances received by families under the coverage of these two organizations stands at 800,000 rials ($20), but it differs depending on the number of family members,” he said.

The lawmaker added that with the latest directive approved by the parliament, the same average will stand at 1.8 million rials ($45.5) from next year.

He elaborated by saying that the sum will be provided from the funds pertaining to the Targeted Subsidy Plan, “especially considering the fact that revenues from the plan to families has been set at 1 million rials ($25) for next year”.

The Targeted Subsidy Plan devised by the administration of former president Mahmoud Ahmadinejad was passed by the parliament in 2010 and aims to replace subsidies on food and energy with social assistance in accordance with the five-year development plans.

The plans outline government strategies in its budget plans for the next five years.

“A directive was also approved for free-trade zones, which states that 1% of the taxes generated by these zones will be spent to support poor families, especially those living in the same zones,” he added.

Haji-Babaie noted that revenues generated from the Targeted Subsidy Plan for the current fiscal year is “about 800 trillion rials ($20.3 billion)”.

Based on reviews conducted by Majlis Joint Committee, Majlis Research Center and an unnamed third entity, “350 trillion rials ($8.89 billion) of this amount have been paid to people [in cash subsidies] and explanations are required for the remaining 380 trillion rials ($9.6 billion) and whether it has been returned to the treasury”, he said.