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18,000 Employers Apply for Virus Bailout Assistance

Since last Wednesday, nearly 18,000 employers and economic operators have registered at the Ministry of Cooperatives, Labor and Social Welfare’s Kara.mcls.gov.ir for coronavirus bailout assistance envisioned for distressed businesses

About three million insured employees are working with more than one million coronavirus-stricken economic enterprises, according to Alaeddin Azvaji, a senior official with the ministry.  

“The Cooperatives Ministry will grant 120 million rials [$690] in loans for each employee, provided businesses retain workers and maintain their payroll at this unprecedented time. Businesses that were forced to shut down will receive 160 million rials ($920) for each employee. The two-year repayment period will start as of October,” he was quoted as saying by Tasnim News Agency.

List of Coronavirus-Hit Businesses

In early May, the Central Bank of Iran updated and communicated to banks the list of businesses directly hurt by the outbreak of coronavirus and eligible to receive loans.  

The list published on CBI’ website includes the following businesses and jobs:

1. Businesses, institutions and companies responsible for any meal prepared outside homes, including restaurants, reception halls, coffee houses and cafes. The Ministry of Industries, Mining and Trade is responsible to determine whether these businesses would be eligible to receive government aid. 

2. Businesses active in the tourism and hospitality sector, namely hotels, apartment hotels, tourists centers, centers receiving pilgrims, guesthouses, eco-lodges, recreational centers and museums. The onus is on the Ministry of Cultural Heritage, Handicrafts and Tourism to determine whether these businesses would qualify to receive government aid. 

3. Transportation companies, namely air, road, rail and marine transportation firms. The Ministry of Roads and Urban Development is responsible to determine their eligibility.

4. Intra-city public transport companies. The Interior Ministry will be responsible to find out whether they qualify to receive these loans. 

5. Travel agencies. The onus is on the Ministry of Cultural Heritage, Handicrafts and Tourism to determine whether these businesses qualify for aid. 

6. Apparel manufacturers and distributors. The Ministry of Industries, Mining and Trade will determine their eligibility. 

7. Manufacturers and distributors of footwear and bags. The Ministry of Industries, Mining and Trade will decide their eligibility.

8. Confectioneries and shops selling nuts, dried fruits, ice-cream and fresh juice. The Ministry of Industries, Mining and Trade will determine the eligibility of these businesses.

9. Gyms, sports and leisure centers. The onus is on the Ministry of Sports and Youth to determine whether these businesses qualify to receive government aid. 

10. Cultural, educational and art centers, as well as media groups. The onus is on the Ministry of Culture and Islamic Guidance, Education Ministry and the Ministry of Science, Research and Technology to determine whether these businesses qualify for state financial support. 

11. Handicraft manufacturers and distributors. The onus is on the Ministry of Cultural Heritage, Handicrafts and Tourism to determine whether these businesses are eligible. 

12. Health Ministry’s licensed private-run health and treatment centers, including laboratories and those providing para-clinical services.

13. Driving schools, barber shops and beauty salons. The Ministry of Industries, Mining and Trade will determine the eligibility of these businesses.

The Ministry of Culture and Islamic Guidance will also determine whether any bookstores or publisher would be qualified to receive government loans. 

$4.3b Aid Package 

The Iranian government has approved a 750-trillion-rial ($4.3 billion) package to help low-income households and struggling businesses impacted by the coronavirus. The loans will be given to small- and medium-sized enterprises hit by the pandemic, according to the website of the Central Bank of Iran. 

The lending rate will be 12% to be repaid within two years, Abdolnasser Hemmati, the CBI governor said. 

Commenting on the interest rate, Hemmati said it is reasonable, given the high inflation rate in the country. 

“Even if banks set an 18% interest on loans, the real interest rate would still be negative when compared to the annual inflation. Any rate below 12% would apparently impose further financial strain on banks,” he said. 

Hemmati said only businesses that did not lay off workers during the corona crisis would be eligible for the loans. He instructed banks to process the loans soon and cut red tape.

Sovereign Wealth Fund’s Contribution

Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei has also approved the withdrawal of $1 billion from the National Development Fund of Iran—the country’s sovereign wealth fund—to help fight the coronavirus epidemic.

A total of 12,860 billion rials ($73 million) have been deposited in to the Iranian Social Security Organization’s Unemployment Insurance Fund, according to the Ministry of Cooperatives, Labor and Social Welfare. 

The funds came from the €1 billion coronavirus relief package from the National Development Fund of Iran, Mehr News Agency reported. 

“Close to 820,930 people have filed for unemployment benefits since March 13, of whom 687,911 were found eligible for benefits,” Masoud Babaie, an official with the Cooperatives Ministry, says. 

"Only those subject to the Labor Law, the Social Security Law and Unemployment Insurance Law will qualify for unemployment benefits," he was quoted as saying by Tasnim News Agency. 

“The total number of individuals receiving unemployment benefits last year [March 2019-20] was 260,000,” he added.

In April, Babaie said the government would allocate 50,000 billion rials ($287 million) to Unemployment Insurance Fund to support those who have lost their jobs amid the outbreak of coronavirus. 

To prevent the spread of the virus, applicants are required to fill out online forms for unemployment benefits at the newly-designed website Bimebikari.mcls.gov.ir, rather than visiting the ministry’s bureaus," he said. 

Hojjat Mirzaie, an official with the Ministry of Cooperatives, Labor and Social Welfare, said earlier that most of those who have filed for unemployment benefits were employed in the services sector.

Ali Rabiei, the government spokesman, has said the economy could lose up to four million jobs as a result of the coronavirus.  

“More than 12 million workers are employed in the services sector. The early impacts of unemployment can be seen in 10 business groups that were closed as soon as the virus was confirmed. Close to 3.3 million of the employed population in the official economy are directly affected by the crisis,” he was quoted as saying by the Persian-language daily Etemad.  

News No: 9549
Date: 2020/05/19 - 23:54
News Source: Financial Tribune

Cooperatives Ministry  Coronavirus  Virus Bailout Assistance 

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