Banks and credit institutions lent 127 trillion rials ($520 million) to 558 knowledge-based companies in the first three months (March 21-June 21) of the current fiscal year.
Data released by the Central Bank of Iran indicate borrowing increased a whopping 247% compared to the first quarter of last year.
Three banks topped the list. The privatized Bank Mellat and Bank Saderat Iran, and state-owned Bank Melli Iran together accounted for about 55% of the loans.
A large portion came from Bank Melli with 30.2 trillion rials ($123m). Bank Saderat and Bank Mellat gave 19.7 trillion rials ($80.4m) and 19.2 trillion rials, respectively.
According to the Iran National Innovation Fund, affiliated to the Vice Presidential Office for Science and Technology, 4,800 knowledge-based companies are active nationwide with 300,000 payroll.
The upsurge in funding the knowledge economy indicates the government’s interest in boosting knowledge-based firms. Government officials have voiced support for tech firms and expressed willingness to extend financial support to help tech ecosystems grow.
Businesses in Iran are gradually moving away from traditional practices to knowledge-based systems. Knowledge-based enterprises are making a decent contribution to economic growth by increasing added value, experts say.
A knowledge-based economy is a system of consumption and production based on intellectual capital, in which a significant part of the company’s value may consist of intangible assets, mainly the value of its workers’ knowledge (intellectual capital).
The scope of a knowledge-based economy is not limited to the technology industry, it can also be used in other sectors like information technology, nanotechnology and biotechnology and other high tech firms.
Accelerating the growth of knowledge-based firms and supporting startups had been high on the agenda of the outgoing government of President Hassan Rouhani. This includes establishing tech centers, providing free workplaces and financial support.
Banks have shown interest in supporting innovative industries through a variety of methods. During a webinar last week, Mehran Moharramian, CBI deputy governor for innovative technologies, spoke about plans to expand financial technology, noting that 26 fintech hubs are currently active in Iran.
"Almost 87% of Iranian banks and credit institutions have established their own innovation centers," he said during the "Innovative Finance for Technological Progress” webinar.
While the knowledge economy has been reliant on banks for credit, there are plans to involve the stock market on this front.
According to Sorena Sattari, the vice president for science and technology, so far 33 knowledge-based companies are listed with the bourse and 16 more are expected to join.
