Innovation Fund Invests $1m in Kermanshah Tech Firms

EghtesadOnline: Iran National Innovation Fund is planning to allocate 120 billion rials ($1 million) to supporting knowledge-based companies and startups in Kermanshah Province by the end of the current Iranian year (March 2020).

News ID: ۷۸۴۹۸۱

28 October 2019

During a three-day visit to the province's science and technology park, Mehdi Khaleqi, a senior INIF official, said the financial aid comes with technical mentorship, consultancy, training and troubleshooting services for 33 firms, ISNA reported.

“Zagros Science and Technology Fund is set to help INIF identify the most eligible tech units and provide them with the aid package,” Financial Tribune quoted Khaleqi as saying.

Masoumeh Khan-Ahmadi, the director of the tech park, noted that qualitative and quantitative development of tech firms and knowledge-based units in Kermanshah is the park's major goal.

She noted that the INIF fund can help motivate tech firms to work harder.

While the Iranian government highlights its financial support for local tech firms as an “achievement”, some experts believe offering loans and grants are the worst kind of help that can be offered to them.

Iran E-Commerce Guild Organization (e-Anjoman) is strongly against “cash handouts and loans”, rejecting such a policy as the “worst nightmare for Iran’s startup ecosystem”.

Shayan Shalileh, secretary of the guild, said government-sponsored loans will divert startups from the right path.

“Over time, they will get deep in the red and instead of relying on their own resources and capabilities, they will seek more and more of the same," he said.

“Instead of generous financial aid, the government should focus on taming the bloated bureaucracy, cut insurance costs for startups and offer tax holidays.”

The latest report published by the Central Bank of Iran on unpaid loans of knowledge-based companies has revealed startling data, which support Shalileh's arguments and raise concerns among experts.

On its website on Feb. 24, CBI said unpaid loans of knowledge-based companies until Dec. 21, 2018, amounted to a staggering 70.1 trillion rials ($620 million), of which 18% (13.1 trillion rials/$115.9 million) constitute bad debt.