Banks Lending to Economic Sectors Up 21% in 2 Months

EghtesadOnline: The Central Bank of Iran has published its latest report on the lending portfolio of banking system, which shows that all banks and credit institutions doled out a total of 689.5 trillion rials ($16.23 billion) to various sectors in the first two months of the current fiscal year (started March 21).

News ID: ۷۴۵۵۰۰

23 June 2018

According to the report published on CBI’s official website, the number indicated an increase of 21% at 119.8 trillion rials ($2.82 billion) when compared with the same period of last year. The money was handed out in the form of 831,224 counts of loans.

As is the norm, the services sector grabbed the lion’s share of the credits at 280.17 trillion rials ($6.59 billion) allocated in the form of 112,681 loans. It was followed by the industrial and mining sector that received 24,671 loans worth 212.44 trillion rials ($4.99 billion).

With 112,681 loans totaling 96.84 trillion rials ($2.28 billion), the trade sector ranked third and higher than the housing and construction sector that obtained 116,088 loans amounting to 53.23 trillion rials ($1.25 billion), Financial Tribune reported.

Iran’s banks and credit institutions gave the agriculture sector 126,205 loans worth more than 46.07 trillion rials ($1.08 billion). A total of 278 miscellaneous loans worth 725 billion rials ($17.06 million) were also handed out.

From the total count of loans, the industrial and mining sector registered a per-loan average of 8.6 billion rials ($202,400), the highest among all sectors. The services sector had the lowest average at 600 million rials ($14,120) per loan.

The CBI report shows that working capital again constituted the dominating share of the facilities allocated in the first two months of the current year at more than 450.87 trillion rials ($10.61 billion) or 65.4% of all loans. That amount was 64.4 trillion rials ($1.51 billion) or 16.7% higher when compared with the same period of the previous fiscal year.

All other purposes of receiving facilities, including but not limited to the establishment of businesses, renovation and purchase of homes, comprised shares of below 10%.

During the period, the industrial and mining sector received more than 181.24 trillion rials ($4.26 billion) in working capital loans, equal to 40% of all such loans allocated to various economic sectors.

More importantly, this amount was equal to 85.3% of all loans allocated to this sector, indicating the financing priority accorded to the sector by the banks during the current year.