BAKU, Azerbaijan, Jan.22
Iran's Monetary and Credit Council has approved to assign advances to automakers on the condition that 80 percent of the sum, equals to $925 million, would be assigned to auto part makers as the payment of automakers' debt to this sector, said the Head of Iranian Association of Auto Parts Manufacturers.
"Automakers have received half of the $2.3 billion advances that was assigned to them by the Monetary and Credit Council at the end of last Iranian year (started March 21, 2019) which was paid to auto part makers as an automakers debt payment," said Mohammadreza Najafi-Manesh, Trend reports citing IRNA.
"The officials of the Central Bank of Iran have approved in their recent sessions that the remaining $1.1 billion advances would be assigned to the two major automakers Iran Khodro and SAIPA on the condition that 80 percent of the advances would be paid to auto part makers," he pointed out.
"The following advances would certainly lead to the flourishing of auto part makers and auto production by the end of the current Iranian year (started March 20, 2020). It is expected that auto part makers could obtain code for trading at the stock exchange since the Productive Credit Certificate known as Gam Securities has become operational," he added.
The Productive Credit Certificate is an instrument for trading money in capital and money markets that would provide advances for production companies. The Productive Credit Certificate will help credible businesses by offering a tradable credit certificate similar to an LC. The certificate should be submitted to suppliers of raw materials, machinery, and equipment.
"The certificate is a production guarantee which producers could obtain advances from agent banks to purchase basic materials," Najafi-Manesh noted.
There are 1,200 official auto part makers in Iran with 550,000 employees while around 400 of those units are closed and 300 semi-active units.