IFC, National Bank of Iraq Partner to Boost Access to Finance for SMEs, Create Jobs
To support the growth of smaller businesses in Iraq and help them create jobs and overcome challenges, including from COVID-19-related disruptions, the International Finance Corporation (IFC) has announced an investment for the National Bank of Iraq (NBI).
IFC's $10 million loan to NBI will allow the bank to increase lending to small businesses in Iraq across a range of sectors. IFC will also provide NBI with advisory services support to help it reach more small and medium enterprise (SMEs) clients and better serve them.
A World Bank report found that about 60 percent of jobs in Iraq are in the private sector and that SMEs are responsible for most of them. Even so, smaller businesses in the country face numerous challenges, including lack of liquidity.
Speaking about IFC's loan to NBI, Chairman of NBI Bassem Khalil Al-Salem said:
"In Iraq, SMEs play a critical role in the national economy, and with the funds from IFC's loan, the National Bank of Iraq will be able to continue its consistent support of this vital sector through increased financing and working capital, which will, in turn, propel business activity, preserve jobs and ensure further economic stability."
Abdullah Jefri, IFC's country manager for the Levant region, said:
"Supporting small and medium enterprises is vital to diversifying Iraq's economy, creating jobs, spurring sustainable economic growth and shared prosperity, especially in wake of the COVID-19 pandemic, which had a heavy impact on the SMEs revenues and operations in Iraq."
The loan announced today includes support of up to $1 million from the Global SME Finance Facility (GSMEF), a blended finance partnership funded by the United Kingdom and the Netherlands. This new loan follows a loan of $10 million IFC extended to NBI in 2020, also made in support of SMEs in Iraq.
IFC has committed $970 million to support Iraq's private sector since 2005, with its current committed portfolio standing at about $121 million in sectors including energy, telecom, and banking.