Direction of Foreign Investment: Thanks to its economic entity, foreign investment will find its way into sectors which are all set to receive and handle it. In other words, foreign investment worms its way into sectors that turn more profits.
To get the incoming foreign investment move in the right direction, we need to pinpoint sectors with higher export potentials. Downstream industries, petrochemicals, steel and software industries which require skilled force along with energy-related industries seem to have high export potentials.

Banking Problems: The banking system here is to blame for part of our industrial woes; it fails to meet financial needs of the industrial sector. Infrastructure problems arising from uneconomical policies and rules along with software problems associated with industrial management account for much of the industrial plight here. These two major software problems interfere with industrial growth. Also, irregularities associated with capital market and banking system are to blame for the better part of the problems industry faces here.
To prove economical, industrial performance needs to be backed up by banking activities aimed at advancing the industry. Foreign investors can contribute to this process, which finally sees industrial capabilities turned to good account.
Iranian banks face both internal and external problems. On the home turf, they lack experts and methods that prove vital for industrial projects and partnership. Deficiencies in these two fields make banks put forth tough requirements for granting loans or launching partnership, which industrialists fail to meet.
Certain regulations that limit the scope of banking activities are piling on the agony forcing financial institutions into fields which never turn a profit. As a result, industrialists keep complaining about the interest banks charge and the red tape associated with getting a loan. On the other hand, banks are forced to put their money into businesses which guarantee a sound return. For instance, various sectors of trade make the most of this situation. The banking system directs its money at businesses where money is recouped in the short-run. The industry that fails to yield in the short-run remains off the table most of the time. Past experience shows most industrialists get the money they need from the unofficial market. To that end, they have to pay higher interest rates.
The banking system holds the key to the black market problem. If banks set reasonable interest rates the problem will fade away. Besides, banks can’t meet industrial needs on the basis of interest rates they announce. This makes industrialists turn to unofficial sources for money.
The banking system should increase its capacities to meet the monetary needs of the people it deals with. It should take measures to strike a balance between money supply and demand in order to draw the attention of industrialists. In other words, a review of methods used in setting interest rates will help banks account for a greater part of monetary needs of industrialists.

Prescription: If industries make science the backbone of their structures and if they remove management software deficiencies, they will be able to avoid many monetary failures. Industries should give floating money management and efficiency a boost to have lower cash needs. That is, if they increase the flow of their services and products they will need less money to hit a certain level of production and sale. This will eventually result in less cash needs. Real interest rates will help industries lower their cash need which in turn helps financial institutions boost their supply capabilities. A sudden enlargement of bigger industries is to blame for their reluctance to lower liquidity.

Ideal Banks: The banking system could play a vital role in shaping small industries. It could set up specialized small-industry banks to help industry as a whole. Smaller industries could prove vital in creating the value-added factor for bigger industries. Smaller financial institutions can contribute to their projects because they are less risky and less demanding.
We should not condition support for smaller industries on creation of specialized banks, thanks to their deeply specialized nature, such banks can help bigger industries.