The
Loan Society of Persia () was created by Russian merchant Yakov Solomonovich Polyakov, who in 1890 negotiated a 75-year concession from the Qajar government to establish a loan bank. It was initially a private-sector company, capitalized with 2 million French francs. Around the same time, Yakov's younger brother Lazar Polyakov opened a branch of his
Moscow International Commercial Bank in Tehran. the Loan Society soon struggled financially, and was purchased in 1894 by the Russian government under the expansionist policy of
Sergei Witte who had concluded that the
State Bank of the Russian Empire could not open a Persian branch of its own without provoking British pushback. The Russian Empire subsequently owned the bank, renamed as
Loan Bank of Persia (), In practice, the Loan Bank operated as a foreign branch of Russia's State Bank. It was thus principally an instrument of Russian government policy, and it does not appear to have ever been profitable. The bank accepted deposits and lent to merchants (mainly for trade with Russia), officials, and to the Iranian government. In the latter capacity, it notably led a major loan to the Qajar government in 1900, for 2.5 million rubles (ca. 2.3 million pounds sterling), refinancing the 1892 loan that had been made by the British-controlled Imperial Bank of Persia. It also engaged in predatory behavior against Russian private-sector business in Persia, effectively leading to much of the latter being nationalized by the Russian state. Its activity, however, was severely curtailed in the aftermath of the
Russian Revolution of 1905 which led Russian finances into severe distress. ==See also==