Bank Saderat Iran, Bank Tejarat, Bank Mellat and Bank Ayandeh signed a pact late last week to give the money to tech teams introduced by INIF, Peivast reported.
Ali Vahdat, the fund's chief, stated that each applicant company will receive 5 trillion rials ($18.5 million) in lending, depending on their level of development and number of employees, "as newly founded and smaller businesses will receive bigger payouts”.
The official emphasized the importance of seed money for fledgling tech enterprises, noting that a positive relationship has formed over the last two years between local banks and the fund, which offers more integrated financial aid.
“Over the period, 160 billion rials [$592,600] in loans and grants have been provided to the expanding technology ecosystem. It is hoped that as the number of tech teams grows, so will the amount of aid packages,” he added.
According to Vahdat, the fund directly supports around 8,000 knowledge-based companies and startups.
Mohsen Dehnavi, a parliamentarian, who attended the event, stated that the knowledge-based ecosystem has yet to find its place in Iran's major economy.
“Multidimensional support to technology teams, including financial, legal and technical assistance, should be continued until they can expand their percentage of GDP and become a sustainable source of revenue for the country,” he added.
INIF Support
According to the local media, INIF also plans to pay 100 trillion rials ($370 million) in loans to fledgling technology firms via banking system in the current Iranian year (started March 21).
Vahdat noted that the amount of allocation has been increasing in recent years, rising from 30 trillion rials ($111 million) in 2019-20 to 50 trillion rials ($185 million) in 2020-21.
This year’s estimated amount is 100% higher than the cumulative loans paid last year.
In an earlier meeting with Bank Saderat Iran CEO Hojjatollah Seydi, Vahdat presented an overview of the fund’s total capital for the current year.
“The National Development Fund, the sovereign wealth fund, is supposed to transfer $200 million to INIF,” Vahdat said.
“The banking system will also assist the institution by continuing to offer help packages to budding tech firms.”
Vahdat noted that Bank Saderat's share would amount to 3 trillion rials ($11 million).
Seydi stated that his bank is ready to extend its share of the loan and hoped that the seed capital will be of assistance to new entrepreneurs and tech companies.
“The bank plans to reduce the loan application process for Tehran-based applicants to seven days and other cities to 30 days, if the necessary documents are submitted with their application,” he added.
To relieve the burden on businesses, Seydi noted that the financial aid would be paid without any interest.
Last Year’s Lending
Iran National Innovation Fund is the state’s arm for providing financial aid to the technology ecosystem.
In the last Iranian year (ended March 20, 2021), INIF lent 50 trillion rials ($185 million) to knowledge-based businesses.
Vahdat said depending on the scale and field of activity of startups, low-interest loans worth 500 billion rials ($1.85 million) were paid.
“These firms have matured to the point that they know how to invest the money into their development,” he said.
“INIF also held weekend events, during which startups introduced their products and achievements to attract private investors. If they raise 20% of the money needed by them, the fund will pay the remaining 80%.”
According to Vahdat, the strategy would curb the state’s role in financing the startup ecosystem and help firms become more independent of state support.
INIF has hosted 20 such events in the last Iranian year, connecting 125 startups with 300 investors.
“The fund is turning startup weekends into regular gatherings for tech firms seeking growth. A growing number of tech enthusiasts and talented students are attending these events,” he concluded.