National Development Fund of Iran Lends $4.7b to Banks
EghtesadOnline: The National Development Fund of Iran deposited 50 trillion rials ($471 million) with agent banks in the first eight months of the current fiscal that ends next March .
The amount was given to banks to meet the needs of companies seeking loans. Morteza Shahid-Zadeh, NDFI head told Tasnim News Agency. “Half of this amount is to be allocated for financing working capital of businesses in the form of loans.”
He said the fund also allocated $4 billion in foreign exchange loans during the period. The rate for foreign exchange lending by NDFI is 3.5%, 2.5% of which goes to banks for covering risks and 1% belongs to the fund.
According to Tasnim, NDFI rules for loans in foreign currency stipulate that the interest plus principal amount of the loan will be deposited in the fund account with the Central Bank of Iran. The sum is circulated for financing NDFI projects, Financial Tribune reported.
NDFI loans are given to companies willing to invest in the private sector, cooperatives, and businesses owned by non-governmental public institutions via agent banks as per regulations governing the NDFI.
With NDFI permission the CBI issues certificates for currency allocation to the agent banks. Also, agent banks are obliged to lend to ventures as per NDFI priorities.
Banks and credit institutions lent 3.58 quadrillion rials ($27.3 billion) in the first seven months of the current fiscal to October, the CBI said.
According to a CBI report, the loans were up by 445.2 trillion rials ($3.39 billion) or 14.2% compared to the corresponding period last year and were given to 5.2 million borrowers.
NDFI, which is independent of the government, was founded in 2011. The goal was to help save money when government earning are high, especially from oil and gas exports. Akin to wealth funds, NDFI lends to both public and private firms in need when government revenues are down, namely during low oil prices.