Azerbaijan, Baku, April 10 / Trend H.Valiyev /
The State Fund for ICT development can start funding 'start-ups' (a business idea, designed for quick implementation) in the next few months, the head of the department of strategic planning, investment and scientific capacity of the Ministry of Communications and Information Technologies of Azerbaijan Elchin Zeynalov told Trend.
According to him, the Foundation will begin its work fully after administrative issues are resolved which is possibly this autumn.
Financial support for 'start-ups' and creative ideas according to the expert, contributes to the development of the Information and Communication Technology of Azerbaijan.
Unfortunately in this respect, the situation today is not particularly inspiring and requires proper development, according to Zeynalov. However as he said, the development prospects are present and considering that innovative ideas will get appropriate financial support, quite a lot of them will appear.
"ICT is one of the fields that requires long term investments and the return is dependent on the success and profitability of projects," he said.
The Statute on the fund defines three mechanisms of financing. These are investments, issuing grants and by credits. Priority will be given to export-oriented projects. Grants will be awarded primarily for the development of innovative ideas after detailed study. The maximum grant may reach 300,000 manats for 36 months. Small grants are provided from 10 to 100,000 manat, medium from 100 to 200,000 manat and large from 200,000 to 300,000 manat.
Depending on the project, according to Zeynalova, the fund may along with grant support, invest for the purchase of shares in the company.
"For example, if the owner decides to sell part of the equity in the company for further development of the project which has already reached the level of return, the Fund can become a shareholder," Zeynalov said.
The Fund is also going to provide small, medium and large credits to entrepreneurs. The amount of small credits varies from 10 to 50,000 thousand manats for a three-year term, medium from 50 to 500,000 thousand manats till five years and large from 500,000 to five million (10 years). The interest rates will not exceed six per cent per annum.
"The interest rate determined by the Fund is quite reasonable considering interest rates at the country's financial market today are15 present and above," Zeynalov said.
Today, there is a great demand for IT products and services due to underdevelopment of this market in the region, evidenced by global financial institutions.
"The Azerbaijani IT market is relatively small. This situation is also typical for other markets in the region, where hi-tech product manufacturing is not developed. This allows noting the existing demand for such production and therefore, on the promotion of prepared solutions and products on these markets. Certainly, we will face great difficulties. I think we can do better if we make the business transfer which will reduce the time for developing export potential. This can be achieved by creating a favourable environment for foreign investors, "Zeynalov said.
According to Zeynalov, small businesses are unable to invest large amounts of assets to scientific research. Free financial resources for this purpose belong to large corporations. "It is necessary to offer them the most suitable conditions in order to attract and deploy their production in Azerbaijan," Zeynalov said.
The idea, he said, is the application of the lowest possible taxes and customs duties which will ensure the inflow of foreign investments to Azerbaijan.
The official exchange rate for April 10 is 0.7846 AZN / USD.