The Ministry of Commerce and Industries in a conference held in Kabul on Saturday criticized the "stagnant" money in Afghan banks, especially as the industrial sector is crucially seeking loans as their businesses grapple with challenges.
Minister of Commerce and Industry Nesar Ahmad Ghoryani demanded that the Afghanistan Central Bank ease and simplify the loan terms of Afghan banks, saying that doing so will develop industries in the country.
The conference was held to thank 24 Afghan companies who manufactured essential products last year amid the COVID-19 pandemic.
“These manufacturers, business people, and investors are our heroes, they foiled efforts by some hoarding groups during the pandemic by controlling and keeping prices in the normal range,” said Abdul Karim Azimi, the CEO of Kabul Chamber of Commerce and Industry.
At the conference, the head of the Bank-e-Millie Afghan (BMA) advised the industry owners they can get bank loans anytime they needed, a remark that sparked reactions from industry owners.
“We should make efforts to rescue our investors from Riba (Riba is prohibited under Shari'ah law), your (speaking to officials from BMA) banks’ loan stipulations and conditions are very strict and no one can easily get loans from this bank,” said Zarif Gul Zadaran, the deputy head of the Afghanistan Chamber of Industries and Mines.
BMA’s chief executive, Abdul Aziz Babakarkhail, declared that Islamic banking has been functioning and it has reduced the benefit rate from 9 to 8 percent. He said that BMA is unable to further simplify the bank’s guarantee procedures and cannot apply changes to the existing rules and regulations.
“If am granted permission to amend rules, believe me, no applicant will be left without loans. I would have removed these strict rules and regulations,” he said.
Meanwhile, Afghanistan’s Central Bank declared that each bank has its own requirements for granting loans.
The bank has revealed a supportive package that will grant loans to Afghan investors.