Economy, Domestic Economy

SMEs Key to Tackling Unemployment

SMEs Key to Tackling UnemploymentSMEs Key to Tackling Unemployment

To tackle unemployment and achieve sustainable economic growth, small- and medium-sized enterprises should be propped up, says deputy minister of cooperatives, labor and social affairs. Hassan Taei also told IRNA economic development is to a large extent contingent on setting up small production units since they do not require large initial capital investment and their products enter the market in a shorter time compared to those of large businesses. Taei put the average cost of job creation in midsized companies at more than 15 billion rials (about $500,585 at market exchange rate), whereas home-based or small businesses need as little as 200 million rials ($6,674) to provide employment. Recently, it was reported that the SMEs Guarantee Fund has increased its capital to 1.25 trillion rials ($35.4 million) from the previous 500 billion rials ($14.1 million). The fund, which started working in 2006, helps small companies by guaranteeing up to 70% of the principal and interest of loans granted by lenders to companies.