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Iranian banks pay loans to exporters at high interest rate

Business Materials 5 November 2014 15:18 (UTC +04:00)

Baku, Azerbaijan, Nov.5

By Fatih Karimov - Trend:

Iranian banks pay loans to exporters at high interest rate of 33 percent, the managing director of the Export Guarantee Fund of Iran Taher Shah-Hamed said.

Shah-Hamed added that unlike many governments in the world, the Iranian government unfortunately provides exporters with financial facilities at high interest rate, Iran's Mehr news agency reported on November 5.

This is why Iranian exporters cannot compete with rivals in the international arena, he added.

If the government wants to emerge the national economy of recession, the only way is to focus on boosting exports through supporting exporters financially, he said.

In September, Mohammad Reza Nematzadeh, Iranian Minister of Industry, Mines and Trade called for an increase in the capital of the Export Guarantee Fund up to $1 billion, naming it one of the prerequisites for the country's exports.

Iranian exporters face challenges like lack of enough support by Iranian banks, shortage of transport facilities and absence of Iranian trade centers in many export target countries. Iranian exporters are still fighting back against the lack of competitiveness factors like export tariffs, added value tax and a lack of WTO membership.

Government figures show a total of 23 billion dollars of non oil exports since March; a 20 percent increase compared to the same period in 2013.

Iran also exports about a billion dollars of technical and engineering services annually but experts believe that the country has twenty times more capacity in the sector.

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