The Iranian banking system, as the primary custodian of economic financing, plays a decisive role in shaping the business environment; however, the bank-centric structure and fractional reserve banking, alongside institutional and legal weaknesses, can transform into a serious obstacle to production and employment growth. Financing in Iran relies predominantly on credit creation and interest rate setting, and this mechanism, due to its impact on inflation, the diversion of resources toward non-productive and speculative activities, and increased demand for loans, has weakened the connection between the financial system and the real sector of the economy. Concurrently, structural and managerial challenges such as the inefficiency of bank supervision, inadequate staff training, a lack of development in modern financial instruments, a multiplicity of contracts and a tendency toward enterprise ownership, alongside operational problems such as the high share of non-performing loans, a lack of financial statement transparency, one-sided contracts, and inadequate project appraisal, have led to a decline in bank efficiency. At the level of the business environment, small and medium-sized enterprises, which form the backbone of the country's industrial employment, face severe restrictions in accessing credit, and the bulk of industrial unit closures is attributed to liquidity shortages. Proposed strategies include fundamental banking system reform, moving toward narrow banking, developing alternative financing methods including supply chain financing and capital market utilization, and reducing the demand for bank credit through targeted monetary policy, the reform of land property rights, and the control of speculation in asset markets.