Kerman Motor Leasing Increases Capital as Financial Reforms Gain Momentum

As Iran’s automotive industry faces persistent challenges — from currency volatility and rising production costs to declining consumer purchasing power — the role of leasing and financing companies as sales facilitators has become increasingly vital. In the latest financial development, **Kerman Motor Leasing Company**, the financial arm of **Kerman Motor Industrial Group**, has announced a significant capital increase, signaling a strategic shift in the financial operations of one of Iran’s largest private automakers.

Strengthening Financial Foundations and Regulatory Compliance

According to the official statement, Kerman Motor Leasing has raised its registered capital by **50 percent**, from **2 trillion rials (200 billion tomans)** to **3 trillion rials (300 billion tomans)**. The move, approved by the company’s board of directors, aims to improve its capital adequacy ratio and strengthen its financial structure.
In the leasing industry, a company’s registered capital directly impacts its ability to obtain large-scale banking facilities and extend credit to customers. Therefore, this 1 trillion rial increase will directly enhance Kerman Motor Leasing’s operational capacity in Iran’s high-demand automotive market.

Central Bank License Extended Until 2028

Another key aspect of this development is the **extension of the company’s operating license by the Central Bank of Iran until 2028**. In recent years, the Central Bank has imposed stricter supervision on financial institutions and leasing firms. The long-term renewal of Kerman Motor Leasing’s license indicates the company’s compliance with regulatory standards and its financial transparency — a factor that can build investor and customer confidence, especially in a market where unauthorized leasing activities occasionally surface.

Preparing for the Capital Market: Alignment with the Parent Company

Kerman Motor Leasing has also revealed plans to **enter Iran’s capital market (stock exchange)**. This step aligns with the broader financial strategy of its parent company, **Kerman Motor**, which is preparing to be listed on the **Iran Fara Bourse (IFB)** under the ticker **“KMC”**.

Positioning the group’s key subsidiaries — including the leasing arm — for public offering reflects an effort to increase transparency, enhance valuation accuracy, and strengthen the overall financial ecosystem of the group.

Benefits of a Public Listing for a Leasing Company

Entering the stock market will allow Kerman Motor Leasing to access **modern financing instruments**, such as debt securities, retail and institutional investment, and other capital market mechanisms. This will reduce the company’s reliance on traditional banking credit lines and enable **greater liquidity stability**, supporting more flexible and diverse installment sales programs for Kerman Motor vehicles.

Embracing Fintech and Digital Transformation

Another strategic priority announced by the company is its focus on **digital transformation** and adoption of **fintech-based solutions**. The Iranian leasing sector remains largely dependent on manual, paper-based processes that increase costs and slow service delivery.

By moving toward digital solutions — such as smart credit scoring powered by big data, online loan application platforms, and electronic contracts — Kerman Motor Leasing aims to enhance customer experience, improve risk management, and operate more efficiently at scale.

Outlook and Challenges Ahead

While the capital increase marks a positive development, the company still faces notable challenges. Persistent inflation, currency depreciation, and managing long-term leasing contracts in a volatile economy pose serious operational risks. Additionally, competition from informal credit channels and the constant need for liquidity to match Kerman Motor’s growing production volume add further pressure.

Ultimately, these developments indicate that **Kerman Motor Group** is evolving from a traditional vehicle assembler into an **integrated industrial-financial holding**, seeking to control the full value chain — from manufacturing to customer financing. The success of this transformation will depend on the speed of its digital initiatives and the outcome of its forthcoming stock market listings.