SMEs Employ 70% of Workforce
Economy, Domestic Economy

SMEs Employ 70% of Workforce

Small and medium-sized enterprises (SMEs) are the backbone of the economy and create job opportunities for a major part of the labor pool, said an expert in the labor market, Alireza Heidari, adding: “About ninety percent of SMEs in Iran have less than 10 employees but they employ nearly 70 percent of the workforce.”
Minister of Cooperatives, Labor, and Social Affairs, Ali Rabei has been emphasizing the role of small enterprises in creating job opportunities on several occasions, announcing government plans aimed at supporting and empowering the SMEs and providing vocational trainings to people in rural areas.
“SMEs are involved in a variety of industries and meet the demands of larger companies, but they are also more vulnerable than the larger enterprises in times of economic crises,” IRNA quoted Heidari as saying.
He noted that at times of crisis, large companies are capable of mitigating the risks and can survive the tough conditions, whereas the SMEs are affected more severely.

Noting that production cost is an important factor in determining the domestic products’ competitiveness, the expert said a prime concern is to help the manufacturers reduce their costs in order to render the import of similar products unjustifiable.
“Providing small enterprises with low-interest loans could help them reduce their production costs,” he suggested, observing that many small enterprises were forced to close down in recent years due to the economic problems.
“Even though official statistics are not available, it’s been estimated that 240,000 former employees are now receiving unemployment benefits,” he said, adding that the actual unemployment rate is higher, “since many unemployed people are not covered by unemployment insurance.”
The Head of Industries Commission of Iran Chamber of Commerce, Industries and Mines, Ahmad Pour-Fallah recently announced that between 12,000 to 14,000 small manufacturing units were forced to close down due to banking issues such as delayed or discontinued payment of banks’ incentives.
This is while, according to IRNA, an increasing number of nonperforming loans (NPLs) have impaired the banks’ ability to grant loans to industries.

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