$69m in Loans to Iranian Tech Companies

EghtesadOnline: The government-backed Innovation and Prosperity Fund (NSFund) has allocated 9 trillion rials ($69 million) in loans to support knowledge-based firms and technology companies.

News ID: ۷۴۶۹۱۳

13 March 2019

Funding will be made available in the next fiscal (begins March 21).

According to Ali Vahdat, head of NSFund, 7 trillion rials ($53.8 million) will go to knowledge-based companies and the remaining 2 trillion rials ($16 million) to other emerging startups and tech teams, not registered as "knowledge-based", the local news website peivast.com reported.

There still is no clear definition for what is a knowledge-based company in Iran, because the term is applied to startups, tech firms, and even auto parts makers, Financial Tribune reported.

Vice Presidential Office for Science and Technology says 4,229 knowledge-based companies have so far been registered in this office and their names are available on its website, isti.ir. It includes startups, accelerators, and auto parts makers.

Firms registered as knowledge-based are eligible for tax holidays and low-interest loans.

Academic institutions are to help NSFund detect fast-growing tech companies and facilitate the loan allocation process.

Impaired Loans

According to independent observers, the authorities extravagance in "supporting knowledge-based companies" adds fuel to the fire regarding startling reports published by the Central Bank of Iran on unpaid loans of knowledge-based companies.

On its website on Feb. 24, the CBI said unpaid loans of knowledge-based companies until Dec. 21, 2018, amounted to a staggering 70.1 trillion rials ($539 million) of which 18% (13.1 trillion rials/$100 million) is bad debt.

As the unpaid debt report spread in the social media, many business owners and market observers complained about the issue, lamenting that the never-ending process of getting loans reserved for knowledge-based companies has always been a disappointing affair.

They demanded clarification about the identity of firms receiving the large loans and conditions set by the banks.

After the CBI report was issued, authorities have not responded to calls from the public for details about the multi-million-dollar loans.