Tech-Based Firms Get $540m in Loans by Q3

EghtesadOnline: Knowledge-based firms received about 24.4 trillion rials ($540 million) in loans from banks and credit institutions in the first nine months of the current fiscal year to Dec. 21, the Central Bank of Iran announced.

News ID: ۷۸۱۸۳۴

24 February 2018

In its latest report published on its website, the regulator put the volume of loans allocated by the banking system to tech firms in the month ending Dec. 21 at more than 3.93 trillion rials ($87.46 million), which bring the grand total of those 10 months to more than 28.33 trillion rials ($630.53 million).

According to the central bank, the total volume of the original amount, plus interest on the loans that tech-based firms had to reimburse to the banking system, was equal to more than 36.81 trillion rials ($819.27 million) by the end of the third quarter.

As 953 firms were among the indebted, the average of their debts stood at 38.6 billion rials ($860,000), Financial Tribune reported.

Bank Saderat owned the highest amount of liabilities at more than 7.34 trillion rials ($163.36 million) equal to 20% of all liabilities by the end of the third quarter, while Bank Mellat and the Bank of Industry and Mine ranked second and third with more than 6.86 trillion rials ($152.68 million) and more than 6.39 trillion rials ($142.22 million), respectively grabbing shares of 18.7% and 17.4%.

From the total liabilities, more than 2.36 trillion rials ($52.52 million) or 6.4% owed by 145 knowledge-based firms were considered non-performing loans by Dec. 21.

Of all the loans allocated to knowledge-based firms in the year ending Dec. 21, more than 16.36 trillion rials ($364.12 million) were doled out by privatized banks. Private banks and credit institutions followed by handing out more than 7.17 trillion rials ($159.58 million) and state-owned lenders came last with more than 4.78 trillion rials ($106.38 million).

The same was true in the ninth month of the current year, during which 128 firms received more than 3.7 trillion rials ($82.35 million) in loans from the banking system with an average of 29 billion rials per company.

In that month, privatized banks were responsible for more than 1.83 trillion rials worth of loans while private banks and credit institutions allocated more than 1.28 trillion rials ($28.48 million) to knowledge-based firms. The share of state-owned banks stood at 585 billion rials ($13.02 million).

In addition to the banking system, the Innovation and Prosperity Fund is the other major source of finance for the mostly fledgling tech-based companies.

In remarks on Friday, the minister of communications and information technology criticized this model of finance.

“Loans in essence do not prove balms for startups, so governments have turned to empowering venture capital and providing innovative ways of financing startups,” Mohammad Javad Azari-Jahromi was also quoted as saying by ISNA.