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.
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.
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