Banking reforms necessary for Iran’s growth
Many Iranian business enterprises are currently facing obstacles to further development as a result of archaic policies of local financial institutions, reports Tehran Iran Daily.
This past January, Iran opened its doors for the first time since 1979 to the establishment of private banks. Despite these reforms, substantial hurdles still exist for Iranian industrialists.
As opposed to Iranian banks, in other parts of the world banks compete for corporate clients by offering financial incentives. The incentives include financial assistance such as: loans or grants to entrepreneurs, high financial security for transactions and convenient means of facilitating these transactions between a corporation and its clients, such as credit cards or electronic banking.
Iranian banks, however, do not yet feel the need to be competitive by even offering such minimal services as credit cards. Iranian companies, as a result, face great difficulties in completing relatively simple exchanges with foreign firms, thereby losing potential deals.
Consequently, Iran’s national economy suffers from the loss of potential business opportunities, which results in decreased growth from the onset.
The state monopoly of the nation’s banking sector was terminated at the beginning of the current year under the five-year economic liberalization program of President Khatami. –(MENA Report)
© 2001 Mena Report (www.menareport.com)