Thousands apply for Iranian credit cards as consumer boom heats up

Iranian credit cards: More than 12.000 Iranians rushed to  apply  for credit cards  yesterday as its Central Bank authorised their issue for the first time in the country’s history. But despite this demonstration of  pent-up demand,  the bank’s  Governor Valiollah Seif warned that it could take some time before the country’s banks get used to the new system. “It would be incorrect to think that these cards will be used quickly within the banking network,” he said.
So far only two banks – Bank Melli Iran and Ayandeh Bank– are reported to have started issuing the  cards which are being issued with three alternative credit ceilings of  approximately $3,000, $10,000 and $15,000  and which can be used for both online and in-shop purchases. They have been designed to comply with Murabahah, the Islamic financing structure whereby each purchase made by a customer is bought by the bank and then sold back on a cost-plus profit basis, initially  at a fixed rate of 18%. Consumers will be able to pay off each purchase in 36 monthly instalments.
Fuelled by the country’s economic resurgence in the wake of the West’s decision to lift sanctions imposed because of Iran’s nuclear  programme,  consumer spending in Iran is expected to grow from an estimated $55.57bn this year  to $78.3bn by 2020, but the authorities in Tehran are becoming increasingly frustrated with the  West’s  reluctance to help it overhaul its outdate banking structure and recently accused the US Treasury of actively discouraging  US and European banks from participating in the process.