Paper
Promoting Financial Inclusion for Growth and Development in Iraq
Emphasizing on the prioritization of financial inclusion in Iraq
4 pages
This paper focuses on the need for promoting financial inclusion to enhance growth and development in Iraq. It was prepared on the basis of a workshop on the legal and regulatory framework for the country. It also draws on findings of a joint WB-CGAP report on the legal and regulatory framework for microfinance. The paper identifies that a well-functioning financial sector is critical for efficient resource allocation and that it leads to increased productivity, greater investment, and higher overall levels of economic growth. It covers the following sections:
- Meaning, importance, and positive effects of financial inclusion;
- Background of Iraq’s financial sector with statistics on the banking sector and undeserved sectors;
- Introduction to the microfinance sector in Iraq with a focus on the growth of the sector and the extent of penetration;
- Supply of microfinance with a focus on two major MFIs;
- Demand for microfinance with data on access to formal financial institutions and borrowing trends;
- Legal and regulatory framework governing microfinance in the country;
- Strategic issues in the microfinance sector with a focus on funding, transformation of NGOs to for-profits, regulatory and supervisory framework, and consumer protection;
- Short-term and medium-term recommendations to develop the sector in the country.
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