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New E-Businesses to Receive Grants

New E-Businesses to Receive GrantsNew E-Businesses to Receive Grants

To support newly-founded Internet-based businesses in the area of information and communication technology, a new roadmap will be prepared to detail the methods for providing them financial support, said the deputy minister of communications and information technology.

"We, at the ministry, are preparing a financial support formula to boost the productivity of these businesses," Mehr News Agency quoted Amirhossein Davaei as saying.

The official explained that providing loans to such firms is not a viable solution, "instead mechanisms should be devised to allocate financial grants to support the fledgling companies", he said.  

Pointing to the sector's investment goals set in Iran's sixth five-year economic development plan (2016-21), Davaei said 600 trillion rials ($16.2 billion at market exchange rate) are to be invested in this regard.

"Half of this amount is expected to be provided by the private sector while the government will provide the other half," he said.

"The government will, for the main part, invest in the development of infrastructures, but must also provide the necessary support to the private sector so that it can grow independently."

Davaei noted that a formula must be prepared so that newly-founded businesses can receive the necessary support, adding that reliance on loans should be reduced and replaced with better methods.

He noted that a new business should be differentiated from a knowledge-based firm.

"In line with the goals of knowledge-based economy, providing loans to knowledge-based firms is a logical step forward, as these companies have gained the needed expertise and are ready to enter the market. This means they will be able to cooperate with the banking system and fulfill their obligations," he said.

The deputy minister also said knowledge-based companies will invest the loan in areas that are economically viable, which enables them to stay on track with the payment plan and reduce the risk of toxic debts.

"The loans provided by the government to these companies have an interest rate of 14-20%," he said.

Newly-founded businesses are a step behind knowledge-based firms for which "a comprehensive roadmap is needed to select a business, provide them with cash grants and monitor their future activities", he said. Davaei further said science and technology parks and entrepreneurship funds will act as a mediator between the ministry and the new businesses.

"The government loans will be granted to mediators who will be responsible for managing the funds with the new business of their choice," he said.

"Hopefully, this plan will ultimately be regulated and included in the government's annual budget."   

 

Financialtribune.com