Financial Tribune- The Export Development Bank of Iran will soon grant credit lines to banks in South Korea, Turkey and Iraq, announced the bank's chief executive.

"Two credit lines collectively worth €175 million will soon be approved for two South Korean and Turkish banks," Ali Salehabadi was quoted as saying by IBENA.

He added that €100 million have been considered for the Export-Import Bank of Korea or Korea Eximbank, while Turk Eximbank will receive €75 million.

The official stressed that the credit lines are not in US dollar and will be issued either "in euro or currencies of the target countries".

Salehabadi also announced that an $18 million credit line will be opened with an Iraqi bank, saying the credit line aims to expand Iran's exports to the neighboring Arab country and "if other Iraqi banks meet the capital adequacy ratio, we are ready to allocate more lines of credit to that country".

"This way, Iranian exporters can cash in their exports through this credit line and the Iraqi bank will repay it over a period of two years," Salehabadi said. "All the best exporters, namely 82% of top-notch exporters in the country, are our clients."

He further noted that EDBI is holding negotiations with Export-Import Bank of India, Eximbank of Russia and another unnamed Russian bank.

"We are now in the phase of doing the paperwork," he added.

According to the official, the bank has also signed memorandums of understanding with the Indonesia Eximbank and the Eximbank of Hungary.

Loan Performance

Salehabadi said EDBI's financing of small- and medium-sized enterprises (SME) has been one of the main focuses of the Central Bank of Iran during the current fiscal year.

"During the first 10 months of the year (March 20-Janaury 19), 198 of the ailing SMEs received 3.884 trillion rials ($100.4 million) in capital from the bank," he said.

During the same period, he added, the exim bank allocated 4 trillion rials ($104.6 million) to "various export-oriented manufacturing sectors with a 5% interest subsidy" following an agreement with the Ministry of Industries, Mining and Trade.

Based on the agreement, the bank will also dole out "loans worth 10 billion rials ($261,500) and 20 billion rials ($523,000) to these industries to meet their working capital needs".

As reported by Salehabadi, EDBI has allocated 38.433 trillion rials ($1 billion) worth of loans in the 10 months to Jan. 19, which registers a 10% rise in working capital loans.

"But loans allocated to certain schemes have declined because one of the policies approved in the shareholders' meeting of the bank was to increase working capital loans," he said.

"The remaining foreign exchange deposits of EDBI equal $1.320 billion, which marks a 150% increase when put up against the corresponding period of last year."

Salehabadi noted that the remaining rial deposits of the bank have reached 16.908 trillion rials ($442.1 million), marking a rise of 84%.

According to the official, the bank's letters of credit stood at 2.95 trillion rials ($77.14 million) by the end of the 10th month, registering another considerable rise of 587%.

In conclusion, Salehabadi put the total value of credit lines opened at EDBI at "about $500 million" and payment orders at $2.7 billion.