Iranian Central Bank Unveils New Framework to Boost Home Businesses and Employment
In a significant move to stimulate economic growth and support job creation, the Central Bank of Iran (CBI) has issued a new directive to commercial banks, making interest-free loans for home-based businesses and employment more accessible than ever.
Key Directives for Easier Access
The official circular, signed by senior CBI officials Mehdi Sahabi and Sara Jalali Far, outlines a streamlined process for obtaining additional financing. A central provision allows supportive institutions to grant follow-up loans for a second time, up to 10% of their allocated credit quota.
To qualify, a business must demonstrate stability and a successful track record. The key requirement is that at least three years must have passed since the previous loan was received. Furthermore, the business must prove it is expanding by hiring new employees beyond its previous workforce. The follow-up loan is also conditional upon being processed through the same bank that provided the initial financing.
Financial Allocations for 2024
According to the directive, the individual loan ceiling for home-based business and employment initiatives has been set at 2 billion rials for the current Iranian year (1404), with a maximum repayment period of 60 months. For specific job categories approved by the Monetary and Credit Council, this ceiling can increase to 3.5 billion rials.
The framework also supports larger, employer-based initiatives, with a loan ceiling of up to 50 billion rials for each new employment position created, emphasizing the policy’s focus on generating tangible job opportunities.
Special Focus on Knowledge-Based Companies
The new regulations offer enhanced support for Iran’s innovative sectors. Knowledge-based, creative, and technology-focused companies are eligible for individual employment loans of up to 9 billion rials. For new or expansion projects within these companies, the loan ceiling rises to 30 billion rials, with a potential increase to 50 billion rials for projects aimed at attracting elite professionals.
Ensuring Financial Discipline
The CBI has mandated that all commercial banks adhere to strict regulatory frameworks when disbursing these loans. This includes conducting proper credit assessments and obtaining appropriate collateral, such as promissory notes or guarantees from credible individuals, to ensure the financial system’s stability and the responsible use of funds.
This comprehensive initiative underscores the national commitment to fostering entrepreneurship, reducing unemployment, and empowering citizens to contribute actively to the nation’s economic prosperity.