“CIGF’s capital stood at 1.1 trillion rials ($) in 2013 but the figure quadrupled during the four years of President [Hassan] Rouhani’s tenure to reach 4.5 trillion rials ($),” Mehdi Hossein-Nejad was also quoted as saying by Fars News Agency.
Hossein-Nejad said investment guarantee funds were not known in the country four years ago and most banks did not accept their guarantees but with the government’s support, the guarantees are now credible and the pace of reimbursing losses has also improved.
“With the noteworthy help of the minister of cooperatives, labor and social welfare, we managed to issue guarantees for the members of cooperative and startup companies, and the government has allowed us to allocate 30% of the resources to non-cooperative organizations,” Financial Tribune quoted him as saying.
The Cooperative Investment Guarantee Fund was established in June 2005 as the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei urged the heads of three branches of government to reduce the role of government in the economy and increase the private sector’s role, with the priority given to cooperatives.
The fund was established with a mandate to help achieve social justice, ensure economic independence, uproot poverty and deprivation, encourage production units and promote employment-generating investment, particularly to support the youth and university graduates.
The CIGF managing director noted that according to the law, CIGF’s guarantees can now be used in tenders and all domestic organs are obliged to accept them.
“In addition to providing credit services, CIGF supports cooperatives’ deals and working capitals while the fee for these services is less than 1%,” he said.
Hossein-Nejad noted that CIGF has established a group investment fund that provides opportunities for development cooperatives to increase their public participation by gradually shifting economic activities from the government to the people.