The Economy Ministry says banks and credit institutions gave an estimated 475 trillion rials ($1.04 billion) in loans to 1,293,216 applicants without demanding collateral and by using their credit rating and payroll.
Collateral-free loans are given by government and private banks. Reports say specialized banks owned by the government accounted for a meager portion of such lending, with Bank Maskan at the top, the ministry said on its website without mentioning the timeframe of the loans.
Banks have long been single out for giving unusually large amounts in questionable loans to big businesses and vested interest, but small loans are few and far between accounting for a meager part of the total.
Collateral-free loans are given to salaried workers and retirees struggling with the worsening cost of living crisis and galloping inflation – a troubling phenomenon now seen across continents including in the rich countries.