Central Bank of Iran Lends Tech Firms $500 Million
EghtesadOnline: The Central Bank of Iran has offered 70 trillion rials ($500 million) in loans since the beginning of the current Iranian year (March 21) to help emerging startups and knowledge-based companies flourish, the CBI chief says.
“The amount of loans has increased by 52% compared to the previous year,” ISNA quoted Abdolnasser Hemmati as saying.
Visiting tech units at Azadi Innovation Factory in west Tehran on Monday, Hemmati said there are over 10,000 startups and knowledge-based companies in Iran and if they receive enough support and attention, they will yield valuable results.
Hemmati noted that government support for the tech units will continue to guarantee their constant growth.
“The technology ecosystem is on its way to flourish further and will soon claim a large share of the domestic economy,” Financial Tribune quoted him as saying.
Officials believe the tech firms’ revenues will ease the domestic economy's dependence on oil incomes.
Extending support to new startups and technology firms has been on the government's agenda since 2013 when President Hassan Rouhani began his first term in office.
Some experts believe offering loans is the worst kind of help that can be offered to a fledgling startup or tech company.
Iran E-Commerce Union is strongly against “cash handouts and loans”, rejecting such a policy as the “worst nightmare for Iran’s startup ecosystem”.
In an interview with Financial Tribune in January, Shayan Shalileh, the former secretary of the union, 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."
Shalileh insisted that instead of loans, the government should focus on taming the bloated bureaucracy, cutting insurance costs for startups and offering tax holidays.
The authorities' extravagance in "supporting knowledge-based companies" has been repeatedly censured by market observers.
The latest report published by the Central Bank of Iran on loans unpaid by knowledge-based companies has revealed startling data, raising 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 ($500.7 million), of which 18% (13.1 trillion rials/$93.5 million) constitute bad debt.
As the unpaid debt report spread in the social media, many business owners and market observers complained about the issue, lamenting that the never-ending process of getting loans reserved for knowledge-based companies is a disappointing affair.
They demanded clarification about the identity of firms receiving the large loans and the conditions under which banks furnished these loans.
After the CBI report was released, authorities have not responded to calls for revealing the details of these multimillion-dollar loans.