The state-run Iran National Innovation Fund has loaned 8 trillion rials ($33.75 million) to startups after the outbreak of the novel coronavirus in mid-February 2020 to cushion the impact of the pandemic on tech-based companies.
Siavash Malekifar, the fund’s deputy for development, said financial aid packages were prepared to help virus-hit businesses normalize their operations, IRNA reported.
The arrival of Covid-19 in the region, according to the official, disrupted the daily operations of many knowledge-based businesses.
INIF vowed to make amends, allocating 500 billion rials ($2.1 million) in loans between January and March 2020.
“As the losses caused by the virus started increasing, the fund decided to buttress the tech firms and startups against the disease,” he said.
INIF called on tech teams to join in providing health-protective and medical devices to improve treatment facilities with 3.5 trillion rials ($14.76 million) of financial aid.
Malekifar noted that out of 400 companies that applied, 70 received funding to produce ventilators, oxygen generators, test kits, facemasks, sanitizers and medication.
“INIF resumed loan payments to the disrupted fledgling and growing businesses a few months later,” he said.
“The second round of loans, worth 5 billion rials [$21,000] for each company, went to small businesses with fewer employees and lower wages. The Vice Presidential Office for Science and Technology introduced innovative teams in tech parks and tech units as the next group for loan consideration.”
According to Malekifar, loans totaling 4 trillion rials ($16.8 million) were given to 500 virus-affected tech units.
Since its inception in 2011, INIF has assisted about 3,000 tech teams with $400 million in funding, according to the official.
Officials believe that investments have paid off, as 450 knowledge-based firms have earned over $1 billion through exports, the fund’s website reported.
Banks Lend $800m
In addition to INIF’s direct payments, 191 trillion rials ($805.9 million) have been paid to 763 startups and knowledge-based companies by local banks in the first nine months of last Iranian year (March 20, 2020-Jan. 20).
Based on the newest report by the Central Bank of Iran, the amount has increased by 128% compared with the same period of the year before.
The data show Bank Saderat Iran has loaned 35.3 trillion rials ($148.94 million) during the period, which is the highest amount lent by domestic banks. Bank Mellat with 33.2 trillion rials ($140 million) and Bank Melli with 30.5 trillion rials ($128.7 million) followed.
The months ending Sept. 21 and Dec. 20, 2020, were the busiest periods for the banks, with 37.7 trillion rials ($159 million) and 30.1 trillion rials ($127 million) paid as loans respectively.
Banks paid the least amount, equal to 6.5 trillion rials ($27.4 million), in the first month of the current Iranian year that ended on April 19, 2020.
CBI Governor Abdolnasser Hemmati earlier said that if startups and knowledge-based companies receive adequate support and attention, they will yield valuable results.
He added that state support for the tech units will continue to ensure their constant growth.
“The technology ecosystem is expanding and will soon claim a large share of the domestic economy,” he said.
Officials believe that tech firms’ revenues will ease the domestic economy’s dependence on oil incomes.
Extending support to new startups and technology firms has been on the government’s agenda since 2013, when President Hassan Rouhani began his first term in office.
Export Promotion
Tech experts and officials believe greater financial support should be directed to boost knowledge-based exports and make domestic tech industries more self-sufficient.
INIF is planning to achieve the goal by designing a scheme that offers tech firms four kinds of support, namely loans, warranties, investments and empowerment services.
Malekifar said tech firms undertaking international trade can receive financial support, foreign leasing and other services to expand their export market.
“Offering grants worth 800 million rials [$3,370] to firms for attending foreign expos is one of the other services offered by the fund to help tech firms develop foreign business ties,” he said.
According to the official, export centers have been established in China, Azerbaijan, India, Iraq and Kyrgyzstan last year, which showed high capacity for introducing Iranian high-tech products to the target market.
“After opening a tech hub in Kenya in late January and another in Syria last week, officials held talks to open similar centers in Afghanistan, Qatar and Oman,” he added.
Malekifar said export centers provide tech firms with shared working space, the opportunity to employ local professionals for marketing their products in small-scale exhibitions, market analysis and sales consultancy, in addition to deploying commercial teams for publicizing the firms and attracting customers.
