BIM to Lend $30m to Struggling Parts Makers

EghtesadOnline: State-owned Bank of Industry and Mine will offer 4 trillion rials ($30.7 million) in loans to 150 car parts makers working with local car company SAIPA.

News ID: ۷۸۴۵۳۰

23 February 2019

According to a report published on the bank's website BIM.ir, as per an agreement signed on Feb. 17 between BIM chief Hossein Mehri and SAIPA boss Javad Soleimani, the latter will send a list of eligible parts makers to the bank. The list should be ratified by the Industries Ministry.

Mehri said, “The loan will hopefully help part makers increase production.”

Soleimani, SAIPA's recently appointed CEO, noted that “The loans would certainly help the firms sustain their operations.”

A week ago, the Central Bank of Iran issued a directive requiring 12 banks to grant loans to the struggling parts makers. Local reports say many car parts companies have shuttered after announcing insolvency, according to Financial Tribune.

The high and rising foreign currency rates, the new US economic sanctions plus gross mismanagement has been blamed for the unending problems of the limping auto industry, which many observers insist has long outlived its usefulness.

Earlier and as per a directive from First Vice President Es'haq Jahangiri, the same 12 banks were told to lend to the two main auto companies, Iran Khodro, and SAIPA, 40 trillion rials ($307.6 million).

The bailout was to help car companies pay some of their mounting debt to the parts makers unable and unwilling to function in the increasingly unstable market.