At a recent meeting of women small business owners in central Tehran one new businesswoman mentioned how she has struggled to find small business loans to fund her new enterprise. This conversation then spilled over onto the internet where private and public groups on social networks began to look at the wider problem; micro-loan distribution.
Credit institutions are traditionally meant to take on the role of small-loan lenders, However, in recent years with incredibly high interest rates (currently standing at over 22 percent for one-year saving accounts) many young people are unable to get ahead in life, especially when it comes to opening businesses.
Iran’s baby boomer generation is coming into their own now (those born after the 1979 revolution), slowly but surely taking over the reins of their parent’s generation, and whom also make up hefty edge of Iran’s demographic make-up. This generation, both male and female by their definition, is a generation apart from their parents, by looking at their cultural make-up they are ultimately wanting change but not at the cost of their lifestyle.
With this in mind, many of Iran’s genX are mostly looking to create new small business ventures, the majority don’t have the capital behind them to fund these new ventures, and thus the failure rate for new business startups in Iran is inevitably high – currently 90% as one startup advisor who didn’t want to be named said to the Financial Tribune.
The wider problem of new business creation also stems from the quality of training. Unfortunately Iran’s academic centers are not catering for business creation or dynamism, their curriculum by its very nature isn’t set up to promote commerce, business or finance. Successful women are trying to help their female counterparts, one such group of women have created the Mehr Foundation, founded Mansoureh Khalili’s, it provides small loans and counseling to would-be entrepreneurs around the country but with a special emphasis in the Iranian capital.
Iran’s taxation authorities municipalities do not take kindly to homerun businesses either, fearing what one tax lawyer said could be a cover for dozens of industries.
Either way, there is need for a discourse to help guide this hidden potential.
