Export Development Bank of Iran–the country's exim bank–is to integrate its resources with funds from the country's sovereign wealth fund to allocate them as loans to Iranian exporters, EDBI’s chief executive announced.
Ali Salehabadi added that the National Development Fund of Iran has assigned a significant amount of credits to EDBI at an interest rate of 11%, which the bank will lend to applicants at a 14% rate.
“Attracting resources from NDFI and various credit lines, alongside [official] policies in recent years, has notably boosted EDBI’s lending power to help increase the volume of non-oil exports,” Salehabadi was also quoted as saying by EDBI’s official website.
As part of a non-oil export stimulus package, NDFI has designated EDBI to offer $500 million as investment and loans to Iran's exporting industries and, according to Salehabadi, the allocation of loans will continue until the end of the current Iranian year in March 2018.
The official noted that EDBI’s foreign exchange and rial resources have significantly improved every year since 2013 and this trend is anticipated to continue next year.
“In the past two weeks, EDBI has managed to receive a total of 6 trillion rials ($146.6 million) worth of credits from NDFI through two different deals while we are going to get another credit line amounting to 5 trillion rials ($122.2 million) from the fund in the foreseeable future,” he said.
In June 2017, the Iranian Parliament had approved a bill allowing the government to take out $1.5 billion from NDFI for a plan to create jobs in rural and nomadic areas in the fiscal 2017-18. The money from the sovereign wealth fund will be extended as loans for job creation and rural development.
According to EDBI’s chief executive, the volume of Iran’s non-oil exports should reach $120 billion by the end of the Sixth Five-Year Development Plan (2017-22), which indicates the current volume needs a threefold increase to reach predicted levels.
The latest data released by the Islamic Republic of Iran Customs Administration and Trade Promotion Organization shows Iran exported 129.648 million tons of non-oil goods valued at $43.93 billion in the last Iranian year (ended March 20, 2017), registering a 3.58% growth in terms of export value year-on-year.
The EDBI chief also announced that the balance of EDBI’s allocated loans by the end of the current fiscal’s first half to Sept. 22stood at 190.2 trillion rials ($4.65 billion), marking a 27% growth compared with the previous year’s corresponding period.
“We need to favor customers that use their loans specifically to create jobs and for exporting purposes while they need to also pay their installments on time and do not increase the bank’s non-performing loans’ ratio,” he said.
Salehabadi called for paying special attention to small- and medium-sized enterprises, as they tend to create more jobs than huge industrial units, hence SMEs need to be at the center of banking system’s attention.