Credit system, Business Environment, Limits and Challenges

Finance is considered as one of the main axes of creating economic activities. Financial institutions such as banks and financial organizations are the main players and role makers and creators of suitable environment in this area, because they, as the financial intermediates, though the decrease of transaction costs, facilitates the access to capital for managers and investors, which in addition to elevating activities and internal economy, brings about the necessary conditions for absorbing foreign investments. The banking system of the country in spite of facing with important developments after the victory of revolution, imposed variety of functions which are against the spirit of banking activities, as an economic institute, was deviated from its main task which is absorbing savings and optimum allocation of them, and its role as an axes creator in development and renovation of the economy has been faded. One of the reasons for this fact is the sophisticated bureaucracy and over-regulation in banking system which threatens the simplicity, transparency and the stability of investment in the country. Therefore, in addition to referring to the position, structure and characteristics of the banking system of the country, this paper tries to evaluate the legal and practical bottlenecks of credit system and offer suitable solutions for structural reform and creating suitable environments in this sector, as one of the main fields of business environment reforms in the country.