Iran begins offering unsecured loans to government employees

Iran’s finance ministry said members of the public could access up to 1 billion rials in unsecured loans.

Iran has launched a major unsecured loan program covering all members of the public as part of the government’s plans to encourage more trade and economic activity in the country after the easing of coronavirus restrictions.

Iranian Finance Minister Ehsan Khandouzi said on Sunday that unsecured loans had been made available to government and private sector employees in a first phase of the program launched over the weekend.

Khandouzi said employees will have to submit documents proving they are on the payroll of ministries or other organizations to receive up to 500 million rials ($1,785) in loans from banks nationwide.

Credit rating requirements will also be enforced by banks in the process of granting loans to customers, he said.

The minister added that unsecured loans would double to 1 billion rials ($3,570) and cover all members of the public in the very near future.

This is the first time that Iran has rolled out a comprehensive unsecured loan program. The measure comes as the government strives to boost economic activity in Iran as the country emerges from lockdowns and restrictions imposed for nearly two years to curb the spread of the coronavirus.

Experts believe the program can give Iranian households more purchasing power at a time when they are struggling with high levels of inflation.

The unsecured lending program was finalized earlier this month after a meeting between President Ebrahim Raeisi and CEOs of public and private banks in which the Iranian president urged lenders to use rating metrics instead. collateral to grant small loans.


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