Iraq's Microfinance Industry: Revitalizing Local Communities

Uploaded by USAIDTijaraProgram on 02.04.2012

The future of Iraq's private sector economy
can be seen in the faces of its entrepreneurs.
There's Walid Ali Hassan
owner of the Two Rivers Fishmarket
in Karbala.
Sayran Ismail Hamad
who runs the Sima Day Care Center
in Erbil.
Bookbinder Mohammed Abbass has one of the most popular shops
in Diwaniyah's Sarai Market.
Then there's Nata Galta.
She sells dates
in a Karbala souk. What do these four people have in common? Each managed to
start or expand a business because of timely microfinancing.
Several even received second and third loans,
which they all paid back.
all of their businesses are profitable
and provide salaried jobs to people previously unemployed.
Iraq's microfinance industry exists largely because
of financial assistance
from the U.S. Agency for International Development
and technical support from experts like Baljit Vohra,
the Lead Project Manager for the USAID-Tijara
Provincial Economic
Growth Program.
When I arrived in Iraq in 2005, we were faced here as a
project sponsored by USAID with a major problem.
That problem related to
helping communities that had been destroyed by conflict
to activate themselves and bring businesses back into the neighborhood.
And as we started looking at ways in which we could facilitate business expansion
and recreate these communities,
we were faced with a problem related to access to credit. There were hardly any institutions or
agencies available at that time
willing to provide credit to these folks
and it was through an initiative that we started, which is now called the
microfinance industry of Iraq,
we started creating facilities and modalities through which we could provide credit
to microentrepreneurs, with a way towards helping them revive
their businesses, open up shuttered-up shops and
begin on the path of economic expansion.
Recently, representatives from Iraq's twelve microfinance institutions
gathered in Erbil
for their sixth annual conference.
They were there to celebrate the industry's growth
and discuss new loan products
designed to help credit-worthy Iraqis
productive businesses.
Donal Cotter,
USAID-Tijara's Chief of Party,
greeted them.
By combining financial incentives with education opportunities
USAID-Tijara adds momentum to Iraq's transition
from a centralized command controlled economy dominated by inefficient state
owned enterprises
to a vibrant free-market economy
where young, underserved, energetic and innovative entrepreneurs, many
of whom are women, can flourish.
Iraq's microfinance industry has a workforce of more than 950 people.
They come from all parts of the country and reflect
the diverse populations
they are pledged
to serve.
Many countries are going through a period of economic crisis but
here in Iraq the microfinance industry is moving forward
because we are on the right path to success.
The highlight of every microfinance conference is the marketplace,
a trade show cum party where each of the country's twelve microfinance
display their products
and introduced a few of their beneficiaries
Among the first to enter this year's colorful souk
were Erbil governor Nawzad Hadi and representatives from USAID.
They saw a variety of products, from dresses,
paintings and fans to wicker baskets and carpets.
But the real value of the marketplace was the opportunity it provided
for USAID officials to meet
and get to know
not only the industry's leading executives but also the talented
entrepreneurs whose small businesses directly benefit from the microfinance
industry American taxpayers helped create.
Iraqis working for the microfinance industry
provide a portal into Iraq's emerging private-sector economy.
For Iraqi entrepreneurs who dream of starting their own business the
development of inclusive financial services and the progress made for the
past eight years in Iraq is remarkable
and is well in line
with policy
to assure broad-based economic growth
and prosperity across the country.
It is especially notable
that as of the end of August of this year
total loan disbursements
across the country were well over $750 million dollars
to more than 321,000 clients
with almost fifty-six thousand of them
being women.
Iraq's microfinance industry is fast becoming a strong indigenous force
for economic development
thanks to the efforts of USAID-Tijara's
Sustainable Microfinance component,
which is headed by Muhammed Junaid.
In 2009
we introduced
a sectoral development approach to the microfinance industry.
Today our outreach has tremendously increased. We also introduced
a group-based methodology
for those clients who could not produce a co-signer's guarantee. So, the members of
the small groups became each other's guarantors
for those loans. These are some of the achievements that
the microfinance component
working together with
twelve microfinance institutions around the country have achieved.