Iranian exporters no longer need to open letters of credit (L/Cs) to obtain hard currency loans from the Export Guarantee Fund of Iran (EGFI) according to its managing director.

Seyed Kamal Seyed Ali also says the commission rate charged by EGFI has fallen and he has called for more capital for the organisation that aims to boost Iranian exports.

Easier hard currency

According to a report in the Iran Daily, Ali says that the elimination of the requirement for Iranian exporters to open L/Cs to obtain hard currency loans is among several measures taken by EGFI to facilitate services to Iranian exporters.

"Henceforth exporters only need to present export contracts to receive EGFI guarantees and make use of hard currency loans," he is quoted as saying.

EGFI and co-operating banks will provide hard currency capital for exporters according to Ali.

More export support

Ali says that reduced rates charged by EGFI, meanwhile, will save its clients around 30 per cent per transaction, but he is concerned that the EGFI's capital is inadequate for the insurance coverage required for growing Iranian exports and it should be raised.

More capital appears to be on the way, however, provided Iranian officials endorse an increase in EGFI capital from 600 billion rials to 2,500 billion rials that has already been approved by the High Council of Exports and the cabinet.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.