A Review of Existing Funds in Iran and International Experiences, Weaknesses, and Proposed Solutions for Challenges Facing Iranian Funds
Abstract
In the past two decades, micro and small-scale financing has emerged in many countries as an effective strategy for creating new employment opportunities—particularly self-employment activities—reducing poverty, and empowering individuals in low-income areas. Some countries have achieved remarkable success in this regard.
In Iran’s economy, microloans and self-employment financing are provided through various channels by the banking system as well as some formal and informal institutions.
Studies and research findings indicate that while some of these programs have been successful, others have not achieved their intended outcomes.
In this article you read about:
Review of the Status of the Justice and Development Fund
The Justice and Development Fund of Iran aims to support local economic growth, complete infrastructure projects, boost employment, and ensure fair resource distribution through its 31 provincial branches.
International Experiences
EU (ERDF): Focuses on reducing regional disparities through innovation, digitalization, SME support, and low-carbon economy.
Turkey: Supports strategic industries via direct/indirect investments to promote sustainable growth and good governance.
New Zealand: Invested NZD 3 billion in regional development to boost productivity and create better jobs.
Domestic Experiences
Iran has established several support funds to reduce poverty and promote employment, notably:
- Imam Reza (A.S.) Fund: Formed in 2005 to finance youth housing, marriage, and jobs; later merged with other support funds.
- Omid Entrepreneurship Fund: Renamed in 2012, it focuses on empowering micro and small rural businesses. Despite its impact, it faces challenges like low loan amounts, bureaucratic delays, and high repayment burdens.
Weaknesses of the Justice and Development Fund
The Justice and Development Fund faces challenges such as lack of transparency, political interference, and risks of corruption.
Proposed Solutions for Effective Implementation of the Justice and Development Fund
Proposed solutions include transparent resource allocation, attracting private investment, public disclosure of decisions, provincial-level monitoring, stronger supervision, and supporting entrepreneurial projects through joint financing.
This study was conducted at Development and Foresight Research Center by Hamid Mohammadi, in collaboration with Mohadeseh Bashir Mashhadi, Golnesa Salavati and Yadollah Divsalar in 2022.
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