Pandemic Loans for Iranian Transporters

۲nd Hardest-Hit Sector by Covid-19

Iran’s transportation sector has sustained losses estimated at 80,000 billion rials ($400 million) following the outbreak of the coronavirus, says Mohsen Sadeqi, a senior official with the Ministry of Roads and Urban Development.

After tourism, transportation took the biggest hit from the pandemic, which prioritizes to receive government aid, he added.

The government approved a 490-trillion-rial bailout ($2.45 billion)—out of a total 750 trillion-rial ($3.25 billion) package for low-income households and struggling businesses—to help small- and medium-sized economic enterprises in the wake of coronavirus.

The Central Bank of Iran identified 14 groups of businesses, including 55 subgroups and 1.2 million enterprises eligible to receive government-backed loans. The loans will be given to small- and medium-sized enterprises hit hard by the pandemic, according to the website of the Central Bank of Iran.

Noting that rail companies and airlines mostly take out loans in foreign currency, the senior official said, “In addition to coronavirus relief measures like granting cheap loans, tax and premium relief, the extension of repayment schedule of foreign currency loans is the newest proposal we came up with to support rail companies and airlines.”

“The lending rate for the government aid package will be 12% to be repaid within two years,” Abdolnasser Hemmati, the CBI governor, said.

Commenting on the interest rate, Hemmati said it is reasonable given the high inflation rate in the country.

“Even if banks set 18% interest on loans, the real interest rate would still be negative when compared to annual inflation … Any rate below 12% would apparently impose further financial strain on banks,” he added. Hemmati said only businesses that did not lay off workers during the corona crisis would be eligible for the loans and instructed banks to process the loans soon and cut red tape.

According to Saeed Rasouli, the head of the Islamic Republic of Iran Railways, the government is offering a total of 9.4 trillion rials ($47 million) worth of low interest loans to rail passenger transportation companies to help them back on their feet after they suffered losses due to the outbreak of the novel coronavirus.

“The loans have been made available from June 8 and 63 companies have been found eligible to receive them,” Rasouli was quoted as saying by IRNA.

Presently, all coronavirus-related protocols as well as social distancing are being followed and trains are running according to the timetables.

$۲۰۰m in Loans Paid So Far

A total of 40 trillion rials ($200 million) in cheap loans have been granted to businesses impacted by the coronavirus outbreak, says Deputy Minister of Cooperatives, Labor and Social Welfare Isa Mansouri.

“Nearly 900,000 people have registered at Kara.mcls.gov.ir for loans; banks are currently working on about 76,000 files submitted by applicants. Each of these files cover a large number of jobs; loans to 380,000 files covering about one million jobs will be paid in the near future,” he was quoted as saying by IRNA.

“For each employee, banks grant 120 million rials [$600] to employers, provided they retain at least one worker on their payroll.”

Mansouri noted that businesses, which were forced to shut down, receive 160 million rials [$800] for each employee and the 24-month repayment period will start in October.