Tech Firms’ Deals With Industries Top $210m Since March 2018

EghtesadOnline: About 30% of short-term agreements signed between knowledge-based companies and industries since March 2018 have grown into long-term contracts worth 27.8 trillion rials ($214.4 million), the head of Iran National Innovation Fund said.

News ID: ۷۸۵۱۴۶

18 December 2019

Speaking at a press conference held in Tehran on Monday, Ali Vahdat added that these deals have been forged in tech events and startup weekends held regularly by the fund, Mehr News Agency reported.

In addition, Vahdat said, INIF has offered loans and aid packages to the tune of 14 trillion rials ($107 million) to 4,500 knowledge-based companies active across the country.

Vahdat noted that the total amount of financial assistance to tech units has seen a 50% growth compared with that of last year, according to Financial Tribune.

Appreciating the collaboration between the Vice Presidential Office for Science and Technology and local banks, Vahdat said it plays a decisive role in supporting fledgling technology units and startups.

"The vice presidential office monitors and introduces the tech firms eligible for receiving funds to INIF. The companies then fill out an application form with banks working with the fund, before being paid," he said.

Emphasizing that the government-based fund will continue to sponsor knowledge-based companies, Vahdat said firms with tech-oriented activities can receive cheap loans to the tune of 300 million rials ($2,307) per each employee, which means a company with a15-member staff is eligible to apply for loans worth 4.5 billion rials ($346,000).

Reza Qorbani, a deputy head of the fund, told the press conference that customers of tech firms' innovative products can also apply for financial assistance for making purchases.

Qorbani said INIF pays cheap loans worth 20 billion rials ($153,800) to buyers who need to repay in three-year installments.

"The move helps customers make their purchase, notwithstanding their temporary financial hardships. In addition, it helps the tech firms develop their businesses by expanding their markets,” he added.

Stronger Support

INIF's efforts in backing knowledge-based companies are in line with the government's policy to implement tech-based solutions in various fields, from commercial spheres to urban management, to curb the country's dependence on oil revenues and make life more convenient for people.

The move started in 2013 when President Hassan Rouhani took office for the first term. Since then, tech units in different fields have experienced significant growth nationwide.

This is while some administrative officials believe the financial aspects of this assistance should be strengthened.

Fatemeh Hosseini, a member of Majlis Economic Commission, has called on the government to fulfill its pledge of providing tech firms with more generous financial support.

As per related regulations, a part of INIF resources is provided by the National Development Fund of Iran.

"In addition to its proactive efforts to push tech firms toward growth, the government was supposed to allocate 0.5% of its general budget to INIF resources," the lawmaker said, adding that unfortunately, this has not materialized.

Hosseini urged the government to prioritize the issue and allocate its share as soon as possible.

"Fledgling startups and tech firms should receive comprehensive and continuous help of different kinds to survive in the post-sanctions era," she said.

Wrong Way

Officials note that financial facilities can help motivate tech firms to work harder and the government highlights its lending to tech firms as an "attainment".

However, some experts believe offering loans and grants are the worst kind of help that can be offered to them.

Iran E-Commerce Guild Organization is strongly against “cash handouts and loans”, saying that government-sponsored loans will divert startups from the right path.

Experts at the organization believe that over time, they will get deep in the red and instead of relying on their resources and capabilities, they will seek more and more of the same. They say the government should focus on taming the bloated bureaucracy, cut insurance costs for startups and offer tax holidays.