Iraq Microfinance Industry Conference Celebrates Innovative Loan Products

USAID-Tijara’s Inclusive Financial Services Stakeholders’ Conference began with a pledge to provide greater financial services to people living below Iraq’s poverty line of $2.20 a day and ended with a celebration of innovative loan products that have created or sustained 203,500 jobs since 2003.

Participants at the Nov. 28-30 symposium in Erbil debated new Iraqi laws and procedures for small- and medium-sized enterprises, as well as balancing risks, returns, transparency and opportunities. Sessions covered mobile banking, Islamic (Al Murabaha) lending, alternative collateral options, and the website.

USAID's Alexandre Deprez receives the State of Iraq's Microfinance Industry report from its author, Keyzom Ngodup. Erbil Governor Nawzad Hadi Mawlood and Ahmad Al-Attar, director of Iraq’s NGO Office also received copies of the document.

“The success of Iraq can only be assured when all Iraqis are involved in the nation’s economic development,” said Alexandre Deprez, the U.S. Agency for International Development’s deputy mission director in Iraq. “Microfinance not only provides many different financial services, but, more importantly, offers ordinary Iraqis the opportunity for entrepreneurship and an indispensible role in building the nation.”

With over 150 participants and 25 speakers from the Middle East and Central Asia, the Inclusive Financial Services Stakeholders’ Conference was the largest microfinance event ever held in Iraq.

The gathering included microfinance executives, government officials, investors, donors, and speakers from the commercial insurance industry.

Iraq’s microfinance industry has made 242,313 micro-loans since 2003 with a total disbursed value of $558 million. There currently are 72,584 active clients with an outstanding loan portfolio of $103 million. Many loan recipients are disadvantaged men and women who operate small businesses, farms, or cottage industries yet lack access to mainstream financial services.

“With less than 1 percent default rate in the Iraqi microfinance industry, the 12 microfinance institutions serving each of Iraq’s 18 provinces have proven that low-income borrowers in Iraq are trustworthy loan recipients,” said USAID-Tijara Chief of Party Donal Cotter.

Over the past year, Iraq’s microfinance industry has increased its outreach to low-income borrowers with a number of new loan products. Group or solidarity loans are available to market and neighborhood vendors who can vouch for each other. More than 25,500 people – people who couldn’t qualify for a loan in the past – have received nearly $24 million to start or expand a small business.

Many low-income borrowers do not have enough money to furnish their homes. So this year the Iraqi Al-Aman Center in Kirkuk began providing Shari’a-compliant financing to young married couples to start a new life together.



Khalid Shawket of Iraq’s Central Bank makes a point with Faleh Daood Salman of the ICBG as Furat Shaker Muhammad, the Central Bank of Iraq's associate director of research, looks on.

Because of the unpredictability of agricultural harvests, Iraq’s farmers have difficulty borrowing from banks. But they are welcome at microfinance institutions. More than 2,300 farmers presently have microfinance loans that allow them to improve their land and diversify crops. Agricultural loans have brought new life to provinces like Ninawa, where farmers can now borrow up to $5,000 and wait until the harvest is over before repayment begins.

The Iraqi microfinance industry has come a long way since its founding in 2003. All 12 of Iraq’s microfinance institutions have established excellent reporting standards and high levels of transparency.

The industry portfolio grew by 42% since last year, and currently has more than 72,000 clients with an outstanding portfolio of $103 million. The size of the loans ranged from $500 to $5,000.

This year’s Iraqi Microfinance Awards, recognizing organizations that demonstrated innovation, outreach and leadership, went to six institutions:

  • Leadership in technology innovation: Al-Bashaer and CHF Iraq.
  • Leadership in product innovation: Tallafar Economic Development Center.
  • Transparent & Accountable Governance: Al-Takadum.
  • Depth of Outreach to the Poor: Izdiharona Economic Development.
  • Depth of Outreach to Women: Bright Future Foundation.


The size and scope of the Inclusive Financial Services Stakeholders’ Conference reflects the recognition the microfinance industry has achieved among Iraqi policy makers as an effective tool to fight poverty and promote financial growth. The symposium was attended by the Central Bank of Iraq, the NGO Assistance Office, and Erbil Governor Nawzad Hadi Mawlood.

“The word ‘inclusive’ is very important to USAID,” Deprez noted. “It means all citizens of Iraq should have access to financial services. Every Iraqi should have an opportunity to start a business. Every Iraqi should have a chance to build a future for their family. Everyone should have a chance to work hard and to achieve their dreams.”