Unlocking Economic Growth: Iran’s Mehr Bank Launches 800 Million Toman Low-Cost Loan Initiative for SMEs
In a significant move to bolster economic development and support domestic enterprise, Iran’s Mehr Qard-al-Hasanah Bank has unveiled a major new financial initiative. Dubbed the “Sarou” scheme, the program is designed to provide substantial, low-cost loans to small and medium-sized businesses (SMEs), reinforcing the nation’s commitment to fostering a resilient and prosperous private sector.
A Strategic Financial Lifeline for Businesses
The Sarou scheme is strategically crafted to offer tangible support to businesses holding valid trade or industrial licenses. Eligible applicants can access loans of up to 800 million tomans by first placing a goodwill deposit with the bank. This innovative model requires depositors to place a sum between 300 to 400 million tomans. Following a waiting period of 30 to 50 days—determined by the deposit amount and chosen repayment term—qualifying businesses can receive an interest-free (Qard-al-Hasanah) loan worth double their initial deposit.
Key Benefits and National Economic Objectives
A cornerstone of this initiative is its highly favorable terms, which align with broader national economic goals. The scheme features an exceptionally low administrative fee of just 4% per annum on the outstanding loan balance, dramatically reducing the financial burden on growing businesses. Repayment is structured to be flexible, with terms ranging from 7 to 9 months, allowing entrepreneurs to tailor the plan to their specific cash flow needs.
Crucially, the initial deposit, reflective of the bank’s charitable and cooperative foundations, remains held until the loan is fully repaid. This mechanism enables the bank to secure the necessary capital to fund these beneficial loans while ensuring participants regain their full deposit upon completion of the term.
Incentives for Banking Integration
Demonstrating a forward-thinking approach, Mehr Bank has incorporated incentives to encourage deeper integration with the national banking system. Clients who possess an active point-of-sale (POS) terminal or a checkbook from the bank will benefit from a reduced 10-day waiting period, expediting their access to vital funds.
A Model for Sustainable Development
Bank executives have emphasized that the Sarou scheme is a cornerstone of their strategy to promote the culture of interest-free banking, support domestic production, and empower the nation’s guilds and SMEs. By facilitating access to capital without demanding heavy collateral, the program is poised to play a pivotal role in improving financial conditions for businesses, driving economic prosperity, and achieving sustainable development.
This initiative stands as a testament to the innovative financial solutions being developed within Iran’s banking sector to meet the needs of its vibrant business community. Eligible enterprises are encouraged to visit local branches of Mehr Bank to leverage this opportunity for growth and stability.