• Sci & Tech

    $454m Tech Aid Package Planned

    The state-affiliated Iran National Innovation Fund will roll out finance via banking system to boost the growth of fledgling technology firms

    The government-backed Iran National Innovation Fund plans to pay 100 trillion rials ($454 million) in loans to fledgling technology firms via banking system in the current Iranian year (started March 20).

    According to Ali Vahdat, the head of the fund, the amount of allocation has been increasing in recent years, rising from 30 trillion rials ($136.36 million) in 2019-20 to 50 trillion rials ($277.27 million) in 2020-21, the fund’s website reported.  

    This year’s expected amount is 100% higher than the cumulative loans paid out last year.

    In a Sunday meeting with CEO of Bank Saderat Iran Hojjatollah Seydi, Vahdat presented an overview of the fund’s total capital for the current year.

    “The government plans to inject 10 trillion rials [$45.45 million] into the fund's coffers in the coming months, according to the 2021-22 budget bill. An additional $200 million are supposed to be transferred to INIF from the National Development Fund, the sovereign wealth fund,” Vahdat said.

    “The banking system will assist the institution by continuing to offer help packages to budding tech firms before the two sources send funds to INIF.”

    Four local banks, namely Bank Saderat Iran, Bank Tejarat, Bank Mellat and Bank Ayandeh, will provide the expected loan sum. 

    Vahdat noted that Bank Saderat's share would amount to 3 trillion rials ($13.63 million).

    Seydi stated that his bank is ready to extend its share of the loan and hoped that the seed capital will be of assistance to new entrepreneurs and tech companies.

    “The bank plans to reduce the loan application process for Tehran-based applicants to seven days and other cities to 30 days if all necessary documents are submitted with their application.”

    To relieve the burden on businesses, Seydi added that the financial aid would be paid without any interest.

     

     

    Last Year’s Lending

    Iran National Innovation Fund is the state’s arm for providing the growing technology ecosystem with financial aid.

    In the last Iranian year (ended March 20, 2021), the fund lent 50 trillion rials ($227.27 million) to knowledge-based businesses.

    Vahdat said depending on the scale and field of activity of startups, low-interest loans worth 500 billion rials ($2.27 million) were paid.

    “These firms have matured to the point that they know how to invest the money into their development,” he said.

    “INIF also held weekend events, during which startups introduced their products and achievements to attract private investors. If they raise 20% of the money they need, the fund will pay the remaining 80%.”

    According to Vahdat, the strategy would curb the state’s role in financing the startup ecosystem and help firms become more independent of state support.

    INIF has hosted 20 such events during last Iranian year, connecting 125 startups with 300 investors. 

    “To date, over 25 startups have raised 340 billion rials [$1.54 million] during these events,” he said.

    “The fund is turning startup weekends into regular gatherings for tech firms seeking growth. A growing number of tech enthusiasts and talented students are attending these events.”

     

     

    Pandemic-Hit Firms

    Besides the seed monies lent by INIF, the fund has loaned 8 trillion rials ($36.36 million) to startups after the outbreak of the novel coronavirus in mid-February 2020 to cushion the impact of the pandemic on tech-based companies.

    Siavash Malekifar, the fund’s deputy for development, said financial aid packages were prepared to help virus-hit businesses normalize their operations.

    The arrival of Covid-19 in the region, according to the official, disrupted the daily operations of many knowledge-based businesses.

    INIF vowed to make amends, allocating 500 billion rials ($2.27 million) in loans between January and March 2020.

    “As the losses caused by the virus started increasing, the fund decided to buttress the tech firms and startups against the disease,” he said.

    INIF called on tech teams to supply health-protective and medical devices to improve treatment facilities with 3.5 trillion rials ($15.9 million) of financial aid.

    Malekifar noted that out of 400 companies that applied, 70 received funding to produce ventilators, oxygen generators, test kits, facemasks, sanitizers and medication.

    “INIF resumed loan payments to the disrupted fledgling and growing businesses a few months later,” he said.

    “The second round of loans, worth 5 billion rials [$22,700] for each company, went to small businesses with fewer employees and lower wages. The Vice Presidential Office for Science and Technology introduced innovative teams in tech parks and units as the next group for loan consideration.”

    According to Malekifar, loans totaling 4 trillion rials ($18.18 million) were given to 500 virus-affected tech units.

    Since its inception in 2011, INIF has assisted about 3,000 tech teams with $400 million in funding, he added.

    Officials believe that investments have paid off, as 450 knowledge-based firms have earned over $1 billion through exports, the fund’s website reported.

     

     

    Export Promotion

    Tech experts and officials believe greater financial support should be directed to boost knowledge-based exports and make domestic tech industries more self-sufficient.

    INIF is planning to achieve the goal by designing a scheme that offers tech firms four kinds of support, namely loans, warranties, investments and empowerment services.

    Malekifar said tech firms undertaking international trade can receive financial support, foreign leasing and other services to expand their export market. 

    “Offering grants worth 800 million rials [$3,630] to firms for attending foreign expos is one of the other services offered by the fund to help tech firms develop foreign business ties,” he said.

    According to the official, export centers have been established in China, Azerbaijan, India, Iraq and Kyrgyzstan last year, which showed high capacity for introducing Iranian high-tech products to the target market. 

    “After opening a tech hub in Kenya in late January and another in Syria in March, officials held talks to open similar centers in Afghanistan, Qatar and Oman,” he added. 

    Malekifar said export centers provide tech firms with shared working space, the opportunity to employ local professionals for marketing their products in small-scale exhibitions, market analysis and sales consultancy, in addition to deploying commercial teams for publicizing the firms and attracting customers.