Proposing a Project-Based Financing Model based on the Project Investment Fund for the Iranian Defense Sector

Mashhadi, Reza; Soltani, Mehran

Proposing a Project-Based Financing Model based on the Project Investment Fund for the Iranian Defense Sector

Document Type : Original Article

Authors

Reza Mashhadi ¹
Mehran Soltani ²

¹ Ph.D. in Economics, Faculty of management and economics, Islamic Azad University, Science and Research Branch, Tehran, Iran.

² M.A. in Financial engineering and risk management, Faculty of Management, Tehran University, Tehran, Iran.

Abstract

The geographical location of the Islamic Republic of Iran in the Middle East and the severe sanctions imposed on the country, have caused a significant reduction in government revenues in recent years. This situation has necessitated the design of financial engineering tools to finance projects of defense and security institutions. Based on preliminary studies, the current model of the project investment funds was selected as a suitable tool for the research topic. The purpose of this research is to design a model based on the current model of the “Project Investment Fund” to finance projects in the country's defense sector. For this purpose, the proposed model of the project investment fund in the country's defense sector was designed. To evaluate the proposed model, a questionnaire with fourteen questions was designed and sent to twenty capital market experts. The questionnaires were analyzed by Kolmograf-Smirnov, one-sample t and Kruskal-Wallis tests and using SPSS software. The findings of these analysis and the opinion of experts indicated that the most important challenges facing investing in Iran’s defense sector are: (1) interest rates below the market average and (2) restrictions regarding the disclosure of information about the proposed defense projects. Finally, in order to meet the expectations of experts, amendments were made to some components of the initial structure and the final proposed model was presented.

Keywords