Iran National Innovation Fund, affiliated with the Vice Presidential Office for Science and Technology, has extended loans worth 170 trillion rials ($618 million) to support the technology ecosystem since December 2018.
According to Siavash Malekifar, the fund's deputy for development, the loans have been provided to growing startups and developed tech companies based on the size of their businesses, IRNA reported.
“Financial assistance is only one of the services offered by INIF to knowledge-based businesses. The fund provides over 70 types of services to businesses, in the form of loans, credit guarantees, investments and empowerment packages,” he said.
“During the period under review, the fund has also issued 2,415 credit guarantees totaling 53.8 trillion rials [$195.6 million] through the local banking system.”
A credit guarantee provides third-party credit risk mitigation to lenders for the absorption of a portion of the lender's losses on the loans made to enterprises in case of default, typically in return for a fee.
With the guarantees in place, knowledge-based companies have signed collaborative contracts worth 269 trillion rial ($978 million) with state-backed and private executive entities over the last three years.
Malekifar stated that INIF has modified its procedures and reduced the processing time to less than a week to ease the issuance of credit guarantees.
The official elaborated on the fund's various types of support to the tech ecosystem, noting that exporters are supported with financial grants, while companies selling products in the domestic market are supported through investments and loans.
“The export promotion packages include training and consultancy, assistance in obtaining standards and export certificates, intellectual property protection, the creation of export networks and the participation and publicity of startups and firms in international expos and Iran’s tech hubs in foreign countries,” he said.
“Iran has so far established houses of innovation and technology, also called iHiT, in seven countries, namely Iraq, Afghanistan, Armenia, Azerbaijan, China, Syria and Kenya. Work is on track to open four more in Russia, Turkey, Venezuela and Malaysia.”
Malekifar said the fund pays each tech company 1.2 billion rials ($4,360), which is around 70% of the expenses, to help them exhibit their products in iHiT centers.
“Creating joint venture funds, making export investments, providing loans for prototype production and providing financial assistance for launching production lines in foreign countries are all examples of services that help the technology ecosystem expand its export boundaries,” he concluded.
Improving Sales
Efforts for expanding exports have partially paid off, as domestic tech data show 2020 was a fruitful year for Iran's technology ecosystem.
According to INIF, tech firms earned about $1 billion in exports during the year.
“The revenue was earned by 450 well-developed tech firms,” said Marzieh Shavardi, the head of the fund's Empowerment Office, was quoted as saying by the fund’s website.
“With about 7,000 talented startups and 6,000 knowledge-based businesses, the export value is expected to register an upward trajectory.”
In mid-March, Esmaeil Qaderifar, an official with the Vice Presidential Office for Science and Technology, said the overall sales of Iranian startups and knowledge-based companies in domestic and foreign markets reached 1.8 quadrillion rials ($6.54 billion) in the last Iranian year (ended March 20, 2021).
Qaderifar noted that tech firms' earnings have been rising over the past few years, from 1.2 quadrillion rials ($4.36 billion) in the year ending March 2019 to 1.5 quadrillion rials ($5.45 billion) in the fiscal 2019-20.
The official noted that the number will continue to grow in the current Iranian year.
“The growth has been achieved despite hurdles. The reimposition of US sanctions against Iran in the summer of 2018 and the Covid-19 outbreak in February 2020 have been blessings in disguise for the technology ecosystem,” he said.
Tech firms spearheaded localization efforts while profiting from extensive state support and zero foreign competition.
According to Qaderifar, startups and tech companies, primarily engaged in nanotechnology, biotechnology, information and communications technologies, and aerospace, are increasingly gaining a larger share of Iran's economy.
“In addition to tech achievements in transportation, auto manufacturing, mining and steel industries, a large portion of medical and laboratory equipment have been indigenized, and 98% of medicines on the domestic market are produced in Iran,” he said.
“This is the outcome of putting faith in the young, talented generation. We expect the ecosystem to become a game-changer in the domestic economy, reducing Iran's reliance on foreign resources.”
Iran has over five million university students who are a vital element of its development efforts.
Qaderifar said public and private sectors should take advantage of this opportunity to invest in the young generation to maximize their potential and achieve long-term benefits.
