Iran Private Sector Setting up Its Own Guarantee Fund

Financial Tribune- The Iranian private sector is setting up its own guarantee fund to facilitate international finance for small- and medium-sized investments, the head of Investment Commission at Iran Chamber of Commerce, Industries, Mines and Agriculture said.

Ferial Mostofi added that the fund will support the "true private sector" as distinguished from the public and semi-privatized sectors that have easier access to state funding resources.

"The fund will support private sector initiatives in the absence of a viable sovereign guarantee fund backing ventures worth up to €50 million instead of projects costing €100-200 million," Mostofi said in response to a question by Financial Tribune.

According to the official, this will help foster production and employment, which have been chosen as the theme of the current Iranian year (started March 21) by the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei.

Referring to the heavy presence of the state in the Iranian economy, Mostofi bemoaned the fact that state institutions tend to prioritize their own projects, leaving little resources for the private sector.

While not revealing the size of the fund, Mostofi said it will be "significant" enough so as not to use up the amount in the course of a year.

"The aim is to increase and diversify the number of companies that can utilize the guarantees," she said. 

The proposal to establish a guarantee fund exclusively to meet the private sector's needs was made during negotiations between Iran Chamber of Commerce and the renowned international consulting firm Deloitte.