Iran Launches National Credit Program to Bolster Low-Income Families and Spur Production
In a significant move to address economic pressures on households, Iran’s Minister of Economy has announced the operational launch of the “Iranian National Credit” program. This initiative, a cornerstone of the government’s first 100-day plan, is designed to provide targeted, low-interest financing to low-income families, positioning it as a major step toward social justice and a people-centric economy.
Addressing Economic Pressures
With inflationary pressures and rising living costs straining the budgets of lower-income deciles, access to affordable capital has become a critical need. The new program aims to break the reliance on costly, informal lending markets by offering a formal, state-backed financial tool. The core objective is to bridge economic disparities and foster greater financial inclusion.
A Innovative Financial Model
A key feature of the “Iranian National Credit” program is its innovative connection to Supply Chain Finance (SCF). Rather than a simple cash injection, credit is extended to the end-user—the household—and is then designed to circulate through the various links of the production chain.
This mechanism offers a dual benefit:
- For Households: It provides direct access to affordable loans.
- For Production: It ensures that suppliers and small to medium-sized enterprises within the chain also benefit from this liquidity, reducing the overall demand for new currency injections and lowering financing costs across the board.
Key Benefits for Eligible Families
The program outlines several direct advantages for qualifying low-income families:
- Affordable Financing: The National Bank of Iran is facilitating loans of up to 700 million Tomans with interest rates of 14%, 18%, or 23%, and flexible repayment periods of 12 to 60 months.
- Streamlined Access: The process significantly reduces traditional barriers. The need for in-person guarantors is minimized, with the system instead relying on the applicant’s digital credit rating for approval.
- Productive Allocation: When integrated with the electronic subsidy and coupon system, the credit can be directed towards productive goods and services, ensuring resources flow into the real economy.
Macroeconomic Impact and Strategic Goals
The government anticipates substantial positive ripple effects from the successful implementation of this program.
- Inflation Control: By reducing the repeated need for direct liquidity injections, pressure on the monetary base is eased, contributing to inflation control.
- Employment and Growth: Easier access to credit for small and medium enterprises is expected to boost investment, preserve jobs, and strengthen domestic economic growth.
- Support for Broader Policies: The program is also seen as a potential support mechanism for other strategic policies, such as energy carrier price reforms, by providing a structured support tool for citizens.
A Forward-Looking Initiative
The “Iranian National Credit” program represents a modern, digitally-driven approach to economic policy. By leveraging fintech and online platforms for account opening and loan applications, it aims to simplify processes and accelerate service delivery. Its successful implementation hinges on robust credit rating systems, strong financial guarantees, and seamless coordination between government bodies and banking institutions, marking a potential milestone in the nation’s economic planning.