Deputy veep: Gov’t allocates low-interest loans to rural areas

The government has allocated $312.5 million worth of low-interest loans for the development of rural economy, said the deputy first vice-president for rural development and deprived areas.

Speaking to Iran Daily, Abolfazl Razavi said the government has launched a plan to promote participation of Iranian villagers in developing the domestic economy.

In the first phase of this project, 70 rural holding companies will be launched during the Ten-Day Dawn celebrations (February 1-11), that marks the ten days prior to the victory of the Islamic Revolution in 1979, he added.

Economic problems and unemployment are among major problems of Iranian villagers, he noted, adding to resolve these problems the government is implementing a plan to strengthen rural economy by creating jobs in villages through participation of villagers and offering facilities.

“This is the most effective and comprehensive plan for strengthening role of villagers in the development of their homelands. Based on this plan, if villages with a population of more than 25 households set up rural cooperative companies, the government will offer them facilities in proportion to the number of the firm’s shareholders.”

Razavi put the ceiling of the loans at $2,343 with an interest rate of 3 percent, adding the interest rate is nil for applicants living in boarder areas.

“In case the number of members of the company exceeds 200 households, there would be no ceiling for granting loans. Applicants will have to repay installments after a two-year break. The monthly subsidy card of the head of the household is the only guarantee required for receiving the loans.”

The decision to grant such loans is an unprecedented move by the government which is in line with the policies and goals of the ‘Resistant Economy’.

“At present, Iranian villagers are not contended with the condition of the villages.”

Villages are required to form rural syndicates to be able to inform decision-makers of their problems, he stressed.

“Urban development constituted the basis for implementing plans before the victory of the Islamic Revolution. The failure to change the approach after 1979 has led to an increase in migration to cities, formation of slum areas and higher air pollution.”

Developing rural areas is a prerequisite for urban expansion, he said adding ignoring this has resulted in the deterioration of the villages.

Speaking at the same round-table, Davoud Danesh Jafari, a member of the State Expediency Council, said “great caution is required so that rural development does not harm the historical identity of the villages. This might turn villages into cities as has happened in the past. Many of the present cities used to be villages.”

He added rural life in Iran has been formed on the basis of agriculture.

“This is while, Iranian villages have been faced with water shortage in the past few years. To resolve the problem, a large number of wells have been dug to make use of underground water for the purpose which has led to the depletion of these underground reservoirs.”

Jafari recalled that in 1956, villagers and urbanites constituted some 70 percent and 30 percent of the country’s population respectively, adding at present, the opposite is true.

“Population of cities is increasing on a daily basis. People move to cities in the hope of raising their income. The government is required to make business in villages more economical.”

He added economic development of villages requires capital, workforce, expertise, natural resources and technology.

“The profits generated by rural production should be invested in villages. This is while, currently, dealers purchase agricultural crops from farmers at low prices and sell them at exorbitant prices in cities. The added value generated by rural production goes to other people.”

Source: Iran Daily. Date: 12 January 2016