By T. Keyzom Ngodup, co-founder and Executive Director at Ideas sYnergy, an Iraq based private sector development consulting company.
First, at the basic level, MSMEs need sustainable access to finance
MSMEs don’t borrow once, but more than once, for initial investment, for working capital, and for business expansion. Delivering one-time credit through government agencies is not only counter intuitive but also counter productive to the work of Iraqi microfinance institutions and banks alike. GoI needs to facilitate financial intermediation through the intermediary infrastructures available, as well as focus on those regulatory initiatives that help scale-up intermediation capability of both banks and non-banks.
MSMEs needs long-term financing
MSMEs, specifically those that are capital intensive and predict breakeven after 2-3 years, need access to longer-term financing, not the typical one-year loan period.