“It is not right that a bank exclusively holds the right to allocate housing loans since it slows the process of getting a loan by applicants,” Alim Yar-Mohammadi was also quoted as saying by IBENA.
The lawmaker noted that in sectors like agriculture, production and services, different banks offer loans to all applicants, which accelerates the process of acquiring the loan so if this approach is implemented in the housing sector, there will be many significant positive outcomes.
The Central Bank of Iran had allowed other lenders to provide home loans as of 2015, but no banks showed interest until Bank Melli Iran this week announced its formal entry into the key sector, according to Financial Tribune.
Yar-Mohammadi emphasized that all the banks should have the right to offer housing loans, as it will considerably speed up the allocation of loans while bringing down lending rates.
“If several banks take the responsibility of allocating housing loans, they can increase their supervision over where the loans are being spent, making it easier for banks to recover their loans,” he added.
Yar-Mohammadi urged all banks in the country to improve their capital adequacy ratio and attract more resources to be able to provide home loans and pull the beleaguered sector out of its long-running recession.
Bank Maskan has been the country’s agent bank for allocation of home loans for years, but recently other banks also declared their interest to enter the sector and provide loans to home buyers.
Last week, Bank Melli Iran launched a special housing scheme which, according to the bank’s CEO, will increase the people’s purchasing power and help the sector.
BMI offers two housing plans, which differ in terms of the amount of investment and interest rate. Applicants of the first type will acquire a priority bond for receiving home loans for every investment of 182 million rials ($4,117) that they keep in their account for a month and each bond will fetch a loan worth 5 million rials ($113) with an interest rate of 17.5%. This is while the investment amount in the second type is 223 million rials ($5,045) but its interest rate has been set at 12%.
This marks the first formal entry of a lender other than Bank Maskan into the housing sector, after the Central Bank of Iran authorized it in 2015.