Banks Lend $34 Billion in 6 Months
EghtesadOnline: Banks and credit institutions in Iran lent 3,821 trillion rials ($34.1 billion) during the first six months (March 21-Sept. 22) of the current fiscal year.
The figure was 789.3 trillion rials ($7 billion) more than the first six months of last year, indicating an annual growth of 26%, according to a report published on the Central Bank of Iran website.
As usual, the largest share went to enhance the working capital of manufactures. Lending in this category amounted to 2,111 trillion rials ($18.8 billion) or almost 55% of the total loans.
Working capital loans increased by 250.5 trillion rials compared to the same period last year, indicating a year-on-year hike of 13.5%, according to Financial Tribune.
Of the total loans for this purpose, mining and industrial companies got 862 trillion rials or 40.8% of the loans.
More than 72% of the aggregate 1,183.6 trillion rials ($10.5 billion) given to companies was used to boost working capital of companies in need.
The CBI said the bigger share of loans for working capital was largely due to the regulator’s concerns about the viability and survival of manufacturing units struggling in the challenging economic conditions, coupled with the tanking of the rial, higher raw material costs and pressures imposed by the new US economic sanctions.
Despite the rising volume of loans, the CBI warned that effective measures should be taken to avert the inflationary impact of rising demand for goods and the ballooning liquidity that has become a perennial concern of business owners and market observers.
Apart from money for working capital, banks gave loans for other purposes, including creating and developing businesses, repair and renovation and home purchases.
Accordingly, banks lent 409.5 trillion rials for “creating” new businesses, 371.2 trillion rials for “development [business units]”, 115.4 trillion rials for “repair and renovation”, 441.8 trillion rials for “purchasing goods”, 123.7 trillion rials in home loans and loans for “miscellaneous purposes.”
In terms of diverse economic sectors, the services sector outperformed others grabbing 1,342.3 trillion rials ($11.9 billion) in loans.
The next major borrower was industrial and mining followed by the commercial sector with 1,183.6 trillion rials and 689.1 trillion rials, respectively.
Agriculture and housing had the smallest share. Loans to farmers reached 318 trillion rials while home loans stood at 283.7 trillion rials.