State of Iraq's Microfinance Industry
This report examines the current state of Iraqi microfinance and predicts trends that are likely to impact its future growth. It states that Iraqi MFIs have emerged as effective demand driven financial intermediaries that offer an alternative to inaccessible formal financial institutions and exploitative money lenders.
MFIs in Iraq have demonstrated scale, depth of outreach, financial and institutional sustainability, and socioeconomic impact. The microfinance sector in Iraq includes 14 NGO-MFIs, operating in 18 provinces. Their achievements as of end of April, 2010, include:
- Improvement in the regulatory environment;
- Central Bank of Iraqs recognition of microfinance as an effective intermediary for small and medium-scale enterprises (SMEs);
- Disbursement of over 197,000 loans of more than USD 453.3 million;
- Outstanding portfolio of USD 85.5 million;
- 99% repayment rate;
- Growth rate of 31%.
USAID, through its implementing partner, USAID-Tijara, has scaled-up initiatives at the macro, meso, and micro levels to create an inclusive financial sector in Iraq. The report predicts that Iraqi MFIs will become more client centric. The sector will grow in importance as a strategic partner and model within the broader MSME strategy and donor coordination will continue to guide outreach and impact.
