Bank Loans Reach $145b in Fiscal 2017-18

According to the Central Bank of Iran that disclosed the figure in its latest report published on its official news website, the aforementioned figure is indicative of a 12% rise amounting to 655.5 trillion rials ($15.6 billion).

The services sector once again absorbed the highest volume of loans last year at more than 2.52 quadrillion rials ($60 billion). These facilities were allocated in the form of more than 5.21 million counts of loans.

The industrial and mining sector ranked second with more than 1.74 quadrillion rials ($41.42 billion) worth of 284,330 loans. This puts the average of each loan dedicated to the sector at about 6.127 billion rials ($145,880), the highest among all sectors, according to Financial Tribune.

The trade sector received more than 1.05 million loans that exceeding 851.72 trillion rials ($20.27 billion). This brings the average amount of each loan handed out to the sector to 485 million rials ($11,548).

The housing and construction sector’s share was more than 1.06 million loans totaling 517.44 trillion rials ($12.32 billion). This is while the agriculture sector received more than 492.90 trillion rials ($11.73 billion) in the form of more than 1.74 million loans. Miscellaneous loans were handed out in the form of 3,824 counts with a total value of more than 6.56 trillion rials ($156.19 million).

Once more, loans allocated as working capital grabbed the lion’s share of all the facilities given by the banking system at 61.7% or more than 3.78 quadrillion rials ($90 billion). When compared with the previous 12-month period, the number shows an increase of 7.9% or 277 trillion rials ($6.59 billion).

The working capital share of the loans is considerably more and less pronounced in the industrial and housing sectors respectively with shares of 83.6% and 19.9% and values of more than 1.45 quadrillion rials ($34.52 billion) and 102.80 trillion rials ($2.44 billion) respectively. The industrial and mining sector grabbed 38.4% of all working capital loans last year.

After the loans were allocated as working capital, loans handed out for the establishment of businesses had the highest share of all the loans doled out by Iran’s banking system during the previous fiscal year at 9.9% or more than 609.46 trillion rials ($14.51 billion).

The aforementioned volume of loans allocated by the banking system to Iran’s economy also includes facilities given to knowledge-based firms that received more than 37.54 trillion rials ($893.80 million) in the previous fiscal year.

CBI data show that the final two months of last year saw the highest volume of facilities handed out to these companies. 

The Iranian month ending Feb. 19 witnessed the allocation of more than 5.01 trillion rials ($119.28 million) while in the month ending March 20, 218 knowledge-based firms received more than 4.81 trillion rials ($114.52 million) with each loan averaging 22.1 billion rials ($256,19).

Private banks and credit institutions, which received loans worth more than 14.43 trillion rials ($343.57 million), were the biggest supporter of fledgling tech firms last year and state-owned lenders grabbed a share of more than 13.18 trillion rials ($313.80 million) to leave privatized banks with 2.05 trillion rials ($48.80 million) in loans.

By the end of the previous fiscal year, the total amount of interest owed by 1,008 knowledge-based firms on their loans reached more than 46.16 trillion rials ($1.09 billion), which brings the average liabilities of each firm to 45.8 billion rials ($1,090). 

Bank Saderat and Bank Mellat, two major private banks, allocated the highest volume of loans to tech firms at more than 1.03 trillion rials ($24.52 million) and 966.7 billion rials ($23.01 million) respectively. They also owed the highest amount of debt at more than 8.11 trillion rials ($193.09 million) and 7.82 trillion rials ($186.19 million) at the end of the previous year.

According to CBI, 140 knowledge-based firms’ debts to lenders amounting to more than 7.43 trillion rials ($176.90 million) or 16.1% of total interests on loans are considered non-performing loans.