Bank and credit institutions plan to allocate 1,000 trillion rials ($4.5 billion) in working capital loans to medium and small-sized enterprises, the governor of Central Bank of Iran said.

Abdolnasser Hemmati said it will be injected in the present fiscal year that ends next March.

“The CBI has made concerted efforts to fund the SMEs,” he wrote in a note posted in his social media account.

His statements came after the Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei on Sunday said the government should improve its support to the SMEs.

Hemmati said more than 27,000 SMEs took loans worth 850 trillion rials ($3.8b) in the previous fiscal year — 57% over the lending a year before.

Taking stock of the role of SMEs in the economy, the senior banker said: “SMEs are seen as a main venue through which knowledge-based sustainable development is achieved”. “Higher added value, innovation, entrepreneurship and higher flexibility are among their more prominent features.”

He expressed the hope that the funds given to SMEs will improve their role in production and employment.

By definition, enterprises run by 50 workers or less, and 100 workers or less are considered small- and medium-sized enterprises respectively, according to the Iran Small Industries and Industrial Parks Organization. Iran is home to 80,000 registered SMEs.

Though small in size, SMEs play an important role in the economy. They outnumber large firms, employ more people and are generally entrepreneurial helping to shape innovation. Small- and medium-sized enterprises constitute 92% of Iran’s 85,000 manufacturing enterprises.

SMEs affiliated to the ISIPO exported $1.74 billion worth of goods in the first half of the last fiscal year (March 20-Sept. 21, 2020) to register a 16.7% growth compared to the year earlier.

The main exported goods were foodstuff, steel containers, plastic products and chemicals that prevent gas hydrate formation.

According to IRNA, their main export destinations were Pakistan with $1 billion, followed by Iraq $364 million, Afghanistan $83 million, the UAE $50 million, Turkey $36 million, Azerbaijan $26 million, Armenia $25 million and India $20 million.

Many people in emerging economies find work in small- and medium-sized enterprises. SMEs contribute roughly 45% of total employment and 33% of GDP in these countries, according to the Organization for Economic Co-operation and Development.