Introducing 6 new financing methods from Shahr Bank
According to the financial news report, quoted by the public relations of Shahr Bank, Seyed Mohammad Mahdi Ahmadim, the director of Shahr Bank, in the first conference of the city financing movement, which was attended by Alireza Zakani, the mayor of Tehran, Mehdi Chamran, the head of the Tehran City Council, Majid Eshghi, the head of the Iran Securities and Exchange Organization and A group of mayors of Iran’s metropolises was held in Tehran’s Milad Tower with the aim of providing basic solutions to attract people’s participation in financing the movement of city administration, and emphasized: financing the city from traditional to modern methods is the need of the country’s metropolises today.
Referring to the capacities of the municipality and the way of funding by abandoning the traditions in this sector in recent years, Ahmadi said: Citizens who deal with the municipality in various sectors, including public transportation and cultural and artistic programs. , they know that the municipality is a showcase that provides them with various services, and it may not be considered that the front line that provides daily services is municipal services, and if this sector is improved, the level of service quality will increase.
Referring to the capacity of municipalities and their financing method based on the elimination of traditional methods, Ahmadi said: Every citizen, when he leaves home, deals with municipalities in the field of public transportation and other fields. From ensuring food security in fruit and vegetable markets to shopping centers and cultural issues, all are linked with urban services.
He stated that every day people talk about many demands to increase their standard of living and maybe because of this a lot of ambivalence will be created because in the elections promises are made by the city council candidates, but we are faced with budget limitations that do not allow the election promises to be fulfilled. to be In this situation, sometimes some municipalities turned to handovers that have been objected to by institutions, or they go towards the use of classic financial services, such as the use of bank commitments, etc. Metro, renovation of the bus fleet and the construction of highways, we are facing the limitation of the capacity of the banking system.
Dr. Ahmadi stated that we are faced with regulations from the central bank that we cannot provide more services and cooperation than we expect, adding: This view has made us go towards a transformation in order to finance the municipality. Let’s change. With the efforts made by the mayors, we have now reached the use of municipal participation papers. A series of policies that the government had, which were not for the public benefit and were not profitable, compensated some of the costs of the project. With these follow-ups, 50% of these bonds were repaid by the government.
The managing director of Shahr Bank pointed out that in the traditional view we use two instruments of banking system facilities and the other one is capital market-based partnership bonds, and stated: This made us change our view and today we use this view of financing Traditional finance has reached new financing. This conference is also for changing the outlook and we must go through this period of transition. If this conference causes some institutions and people to go to banks with the intention of using new financing tools, then it can be said that this conference has been successful.
Dr. Ahmadi further noted: If we want to consider an ecosystem for the proper use of these tools, we must get acquainted with the monetary and financial policies of the government. The central bank’s view is liquidity control. On the other hand, the foreign exchange policy of the country is also floating and managed. If we consider the macroeconomic environment, we see that the government uses taxes, the banking system uses contractionary policy, and the currency system is also floating and managed. In all economic schools, if we use these three tools together, we will face economic stagnation. Here, the use of traditional tools is more difficult.
He said: In this regard, municipalities will face major challenges. Due to the legal restrictions, we should not have a traditional view of financing. This session is to use new tools instead of classic tools. With the view of the stock exchange on this conference, I hope that they will help the municipalities for financing. Because this issue of help will improve the lives of the city’s people. In financing tools, we predicted six tools. One of these tools is using real estate funds and land and building funds. If we can use this tool and make the surplus properties of the cities productive, we will be accepted by the citizens. Because we have benefited from the added value caused by the increase in inflation.
Regarding the need to build trust for investment from the people, Dr. Ahmadi stated that it is an important factor for the progress of projects and added: We have many projects that are considered only in Tehran as the use of hotels to increase tourism capacity. If capital market parties are used to invest this issue, we can use people’s petty cash to equip resources. With the trust that people have in an institution like Shahr Bank, we can key these projects. People can also use the business of this organization. Using the capacity of Rial code is an issue that if we don’t use it, we are doomed to failure. Municipalities can be helpful in this matter due to their recoverable assets. We request that this legal view prevails in the parliament and that the stock exchange organization also uses this issue.
He said: In the discussion of neighborhoods, because there is a neighborhood-oriented view among the mayors, we can define it in micro projects. Considering that inflation has happened in people’s lives, we request Mr. Eshghi to increase the capacities so that we can use people’s pocket money to equip the neighborhoods. Many projects are such that if we are allowed to invest in them, we will make a profit, but we should not introduce projects that we have doubts about because we may not be able to gain people’s trust. If people come to the stage and we can gain their trust, many problems will be solved.
Referring to the importance of the fuel benefit fund project, the CEO of Shahr Bank noted: The fuel benefit fund is an issue that we unveiled in Mashhad last year. But we still could not get its permits. Currently, we use imports to consume fossil fuels. But with this method, we can import currency into the country, modernize public transportation, and reduce air pollution. Last year, Dr. Zakani agreed with the Chinese parties on this issue because this route guarantees the modernization of Tehran’s public transportation. We intend to do this by relying on internal capacities. We only expect the government to ease things. One of our capacities is to use the money market. But the easiest way is not the best way. We should not provide cash to economic actors because it causes inflation. The largest amount of contractors in different fields are involved and facing municipalities. So the chain we have now does not need to move cash. We were able to implement the use of Bratcard in Tehran Municipality. Now this can be spun as a chain to use credits instead of spinning cash.
He added: In the money market, there is a new instrument called a special investment deposit certificate, which is economical and suitable for projects that are about to be completed, for example, 80% of which have been completed. In order to be able to move from the traditional view to the new view, we must recognize this tool. The purpose of these meetings was to have basic training for friends to know these tools and use them correctly. We need to assure people that by investing in urban projects, their level of well-being will increase and the repayment of the principal of your money is guaranteed. We should not only think about providing foreign capital. Taking advantage of financial accelerators in Bank Shahr is another condition for success. The trust of entrepreneurs and professional urban developers is an issue to consider. Because the management life of mayors is short, urban entrepreneurs do not trust to invest in urban projects.
Ahmadi added in the end: We are looking to connect professional developers to accelerators so that the bank’s tool companies and developers are on their side. Facilitation of the government and the parliament as governance is an important issue. We don’t expect the government to just inject funds despite the problems it is facing, but we expect facilitation. We don’t want regulations to prevent municipalities from providing services. We expect that these contradictions will be resolved and the rules and regulations will be simplified. We understand the limitation of the government’s budget, but we expect an easing. I hope this meeting will enable us to bring new financing to the fore.