Promoting Financial Inclusion for Growth and Development in Iraq

Emphasizing on the prioritization of financial inclusion in Iraq
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.

About this Publication

By Aziz, T.A. , McConaghy, P.