Iran’s Trade Promotion Organization has instructed banks to lend 40 trillion rials ($148 million) in working capital loans to exporters.
The lending is part of an incentive package designed to support non-oil export in the current fiscal year that ends in March 2022.
Half of the funds are will be procured from the National Development Fund of Iran, the sovereign wealth fund, according to Alireza Payman-Pak, the newly appointed TPO chief.
NDFI funds will be deposited with agent banks, namely the Export Development Bank of Iran. “Half of the loans will be paid from the banks’ own resources,” Payman-Pak was quoted as saying by the TPO website.
Provisions of the 2021-22 budget stipulate that the government must offer 7.6 trillion rials ($27.9m) in export incentives to exporters.
Furthermore, 1.9 trillion rials in custom revenue should be given for promoting agro export. The loans will be granted at low interest rates, the official said without elaboration.
As for the eligibility of borrowers, Payman-Pak said export capacity in the past three years, credibility of exporters and whether the company is a commercial or a manufacturing unit are the main criterion.
Grappling with US economic sanctions and the coronavirus pandemic, foreign trade authorities are struggling to expand export markets.
Iran's non-oil trade stood at 38.38 million tons worth $20.9 billion in Q1 (March 21-June 21) in fiscal 2021-22, registering a 25% and 50% growth in volume and value respectively YOY, according to the Islamic Republic of Iran Customs Administration.
Exports stood at 30 million tons worth $10.7 billion up 38% and 69% in weight and value, respectively, compared with the previous year, according to the IRICA head, Mehdi Mirashrafi.