The Export Guarantee Fund of Iran, the Trade Promotion Organization, Iran Insurance Company and Saba Business Development Holdings on Tuesday signed an agreement to help reduce risks of foreign trade for Iranian exporters by providing effective insurance cover and guarantees.
According to a press release seen on EGFI's website, the main objectives of the deal include supporting and promoting export from Iran by extending guarantees and investing in the production of exportable goods, holding meetings between Iranian businesses and potential foreign partners, and expanding the scope of insurance services to Iranian expats wanting to trade with the homeland.
Based on the new agreement, Iran Insurance Company, the largest and the only state-owned insurer, will offer special insurance services to businesses introduced by the TPO. The credibility of these companies will be determined by the EGFI.
Established in 1973, the EGFI was recreated in 1994 as a legally and financially independent entity 100% state-owned and affiliated to the Ministry of Industries, Mining and Trade. The fund helps in promoting non-oil exports by covering political and commercial risks and issues credit guarantees to help companies meet their financial commitments.
TPO is a state body affiliated to the Ministry of Industries and is in charge of promoting foreign trade.
The agreement also includes measures to develop special support packages for SMEs and knowledge-based companies.
SMEs play an important role in the domestic economy outnumbering larger peers, employ more people and are generally entrepreneurial and innovative.
Reports say SMEs constitute 92% of the 85,000 manufacturing companies in Iran. According to data published by the Vice Presidential Office for Science and Technology in 2021, more than 6,000 knowledge-based companies were active nationwide. Sales of goods and services handled by these firms on average is in the region of 900 trillion rials ($3b) a year.
Saba Business Development Holdings, affiliated to Iran Insurance Company, will henceforth focus on helping exporters expand their footprint in target markets.
It will also invest in developing new production units and help owners in efficiently running their business, market products and export to foreign markets.
The signatories also agreed to provide consultancy in legal, technological and engineering areas to clients as well as holding insurance-related training courses.
Iran’s export sector was hit hard by the deadly coronavirus as many border crossings were closed during the initial period of the virus spread in 2020.
Iran’s foreign non-oil trade stood at 145.7 million tons worth $73 billion in the last fiscal year that ended in March.
According to the Islamic Republic of Iran Customs Administration, exports reached 112 million tons worth $34.52 billion and imports were at 34.4 million tons worth $38.5 billion.
The main exports were gasoline, natural gas, polyethylene, propane, and pistachio.
