The Vice Presidential Office for Science and Technology has extended 18 trillion rials ($70.3 million) in cheap loans to 166 knowledge-based companies by using the resources of the National Development Fund of Iran.
Based on an edict of the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei, the office has been authorized to tap into the sovereign wealth fund’s resources for supporting knowledge-based companies.
In a letter to the Leader, Vice President for Science and Technology Sorena Sattari has detailed how the office used the money.
According to Sattari, the loans have been paid to 166 knowledge-based companies active in agriculture, industrial and mining sectors based in rural areas, ISNA reported.
“Thanks to the financial aid, the borrowers have made noteworthy progress and grown into large enterprises,” he wrote.
The support has been in line with the country’s policies of mobilizing the capabilities of knowledge-based companies and startups to help bolster domestic productivity and cut reliance on foreigners.
Sattari earlier said the technology ecosystem has high potentials for supporting Iran’s troubled economy and converting it into smart economy, provided it receives the government’s backing.
In addition to state support, the private sector has also been investing in startups and tech firms.
“Fortunately, venture capital funds are growing in Iran … becoming popular with investors. This can considerably help startups flourish,” he said.
Venture capital is a type of financing that investors provide to startup companies and small businesses that have long-term growth potential. The capital is suppled by well-off investors, investment banks and financial institutions.
“Nine VC funds are currently active in the country, the number of which will increase,” Sattari added.
The local banking system has also played a pivotal role in injecting money into the startups.
Hojjatollah Seyyedi, the head of Bank Saderat Iran, said the bank has provided knowledge-based companies with loans worth 8 trillion rials ($31.25 million).
“We plan to expedite the lending process and increase the amount soon. Knowledge-based units are important elements in the economy, so investments of any kind in the tech ecosystem can help improve the economy,” he added.
Central Bank’s Report
Support for Iranian tech firms has been high on the agenda of the Islamic Republic over the past decade.
Government loans regularly offered to startups and tech firms constitute a major share of support for the sector. Iranian knowledge-based companies and tech firms received 137.6 trillion rials ($537.5 million) in loans during the last Iranian year (ended March 19, 2020), the Central Bank of Iran reported.
According to CBI, during the year, a total of 1,108 tech units applied for loans that averaged 124.2 billion rials ($485,000). The figures show a 74.5% rise compared to the amount of loans paid in 2018-19.
CBI Governor Abdolnasser Hemmati told reporters that the bank is willing to continue its allocation of financial facilities to help the tech ecosystem flourish.
In early April, Hemmati said the bank was mulling over starting collaboration with the state-backed Iran National Innovation Fund to establish support centers in all provinces to ease startups’ access to legal and financial support.
Besides the provincial funding centers, plans are under consideration to set up offices for offering specialized services to firms active in the fields of nanotechnology, social innovative services and the internet of things, he added.
Covid-19 Hits Businesses
State support has also been extended to fledgling tech businesses affected by the novel coronavirus that spread across the country in mid-February.
In August, Iran’s Ministry of Communications and Information Technologies reported that Iran has spent 1.24 trillion rials ($4.84 million) on virus-hit tech units.
Based on the report, around 72% of Iranian startups and tech businesses have been severely impacted by market stagnancy caused by the spread of Covid-19.
As arranged by ICT Ministry, the money has been allocated to tech units in the form of two loan tranches: The first worth 542.3 billion rials ($2.11 million) was paid from February to April and the second worth 700 billion rials ($2.73 million) are being offered since June.
Bank of Industry and Mine CEO Hossein Mehri also provided a blueprint of financial aid extended by the bank to tech firms.
He said BIM paid 2.2 trillion rials ($8.59 million) in loans to 29 startups and technology companies in the first quarter of the current Iranian year (March 20-June 20).
The figure has seen a 100% rise compared to the year-ago period, he added.
Mehri also said the bank signed an agreement with Amirkabir University of Technology and Sharif University of Technology to extend resources for the university-born tech teams and startups.
Officials believe that the pandemic cannot be controlled without utilizing the potentials of tech ecosystem. The country’s knowledge-based economy, which has currently grown significantly, is being helped by young entrepreneurs and tech teams to withstand the negative effects of the disease.
First reported in Iran in mid-February, the virus has so far claimed the lives of 53,448 people out of a total of 1,152,072 infected.
According to the Health Ministry, 875,943 patients have so far recovered from the disease.
