EghtesadOnline: Banks and credit institutions gave 9,007.8 trillion rials ($33 billion) in loans in the first five months of the current fiscal year (March 21-August 22).
Lending was 51.3% or 3,054.9 trillion rials ($11b) higher compared to the corresponding period of last year, the Central Bank of Iran reported.
As always, a big segment of money went for working capital accounting for 67.8% or 6,103.6 trillion rials ($22.5b) of all lending in the five months.
Mineral and industrial companies were the main recipients of the working capital loans, borrowing 2,191.8 trillion rials ($8b) or 35.9% of the total in this category.
Credit to mines and industries stood at 2,755.6 trillion rials ($10b) in the period.
Higher working capital lending reflects lenders’ concerns about the viability and solvency of manufactures struggling due to the increasing economic challenges worsened by the new coronavirus variants that continue to batter businesses across the board.
Apart from working capital, other targets of banking loans were creation and expansion of business, repairs/renovation and buying homes.
Banks gave 1,016.8 trillion rials ($3.7b) for setting up new businesses, accounting for 11.3% of the total lending. Other loans included 729.3 trillion rials ($2.7b) to expand businesses, 145 trillion rials ($530 million) for repair and renovation, 552 trillion rials ($2b) for purchasing goods and 101.12 trillion rials ($370m) to homebuyers. Miscellaneous loans reached 359.7 trillion rials ($1.3b).
In terms of overall economic sectors, the biggest borrower was the services sector with 3,716.5 trillion rials ($13.7b), accounting for 41% of the total.
Commercial companies took out 1,453.7 trillion rials ($5.3b) in loans or 16% of the total. As often, agriculture and housing were at the bottom end. Farmers borrowed 619.8 trillion rials ($2.2b) and borrowers in housing and construction sector took 460 trillion rials ($1.7b).
The CBI said despite the rise in lending stronger measures are needed to curb the inflationary impact from the rising demand for goods.
Addressing the funding needs of companies has become a priority of banks as the government struggles to save jobs, mitigate the colossal damage from Covid-19, improve domestic production and cut imports.
Iran's banks injected more than 18,989.2 trillion rials ($73b) into the economy in the last fiscal year that ended in March -- up 9,239.3 trillion rials ($35.5b) or 94.8% compared to the year before.