Financial Inclusion in Iraq: Progress and Future Goals @DINARREVALUATION

DINAR REVALUATION REPORT: Financial Inclusion in Iraq: Current Landscape and Future Aims, 18 SEPT

 Financial Inclusion in Iraq: Current Landscape and Future Aims

Financial inclusion in Iraq has been a significant focus in recent years, with efforts aimed at enhancing access to financial services for both businesses and individuals, particularly those in vulnerable populations. As of September 17, 2024, the situation in Iraq presents a picture of progress and potential, yet challenges remain. 1  3  5

Current State of Financial Inclusion in Iraq

Low Uptake of Financial Services

Historically, Iraq has faced challenges with financial inclusion, with less than 20% of adults holding bank accounts with formal financial institutions as of 2021, according to the Global Findex Database. 1 This scenario is further complicated by the fact that less than 5% of micro, small, and medium-sized enterprises (MSMEs) use bank lending, limiting their growth prospects and the country's overall economic development.

Initiatives to Enhance Financial Inclusion

To address this gap, initiatives like the SheCan program by the World Food Programme (WFP) have been launched. SheCan is designed to bridge the financial inclusion gap for vulnerable populations, specifically targeting women and smallholder farmers.  2 By collaborating with local financial service providers, SheCan designs and implements gender-responsive lending products tailored to the unique needs of these groups.

Recent Surge in Financial Inclusion

Notably, Iraq has witnessed a significant surge in financial inclusion, with a reported increase of 48.5% in the current year, as announced by the Iraqi Private Banks League (IPBL). 3 The IPBL attributes this change to government-backed initiatives and aims to achieve a 60% financial inclusion rate by the next year.

Future Aims and Challenges

Aiming for 60% Financial Inclusion

The IPBL's target of achieving a 60% financial inclusion rate by the next year is ambitious but reflects the commitment of the Iraqi government and private sector to improve access to financial services. Efforts are being made to integrate financial literacy into school curricula and provide continuous training to develop the necessary infrastructure.  3

Economic Challenges and Opportunities

Despite these efforts, Iraq faces significant economic challenges, including dependence on oil revenues and vulnerabilities to oil price volatility. The International Monetary Fund (IMF) has highlighted the need for fiscal adjustments and private sector development, including labor market reforms, financial sector modernization, and restructuring of state-owned banks. 5

Promotion of SMEs and Access to Finance

Recognizing the role of SMEs in job creation and economic growth, projects like the Promotion of Small and Medium Sized Enterprises (SMEs) in Iraq, supported by the International Labour Organization (ILO), aim to provide sustainable access to financial services for SMEs and startups, with a focus on youth and women.  6

G20 Financial Inclusion Indicators

The G20 Financial Inclusion Indicators Database offers additional insights into Iraq's financial landscape but does not provide specific figures as of the latest update. 4

Conclusion

Financial inclusion in Iraq is on the rise, driven by government and private sector initiatives, as well as support from international organizations. The country's efforts to improve access to financial services for individuals and MSMEs, particularly those in vulnerable populations, are crucial for economic growth and social well-being. However, significant challenges remain, necessitating further reforms and investment in infrastructure and education.

LATEST FROM MILITIAMAN, 18 SEPT

 Militia Man  

Electronic payments...you can get this feeling it's showtime because they're really doing the development of the reality of financial inclusion.  They're spreading that financial culture around the country...It's coming, the growth stage. 

Militia Man  

The development Road Project is opening up Iraq to the region and into the international world.  The private sector is going to be the main driving force...They're going to have to expose an exchange rate at some point in time, sooner than later.  I'm going to go with sooner.

 They're talking about Iraq as going global and to the international financial system.

  With that has responsibility and that responsibility will be defended by the central bank.  That responsibility is to have a stable exchange rate and to provide commerce throughout the country in and out and across borders, with efficiency and transparency.   That's what they're going to have and that's what they're doing.  There's looking to be no stopping it.  It's brilliant.

  The news out of late is completely off the charts and it points to I believe international.  Internationalism is where Iraq is headed.  I don't believe for a minute they're going to stop until they complete it...

https://dinarevaluation.blogspot.com/2024/09/latest-from-militiaman-17-sept.html

September 2024: Tax Law Review & Collection System Overhaul

Iraqi government moves to impose taxes on social media sites BY FRANK26, 18 SEPT

 KTFA

FRANK26: "EXCEPT FOR GURU FRANK26... SMILE".............F26

Iraqi government moves to impose taxes on social media sites

9/16/2024

 

Financial expert Nabil Al-Marsoumi revealed on Monday that the Iraqi government is planning to impose taxes on social media sites in Iraq, among the people covered by these taxes.

Al-Marsoumi told Shafaq News Agency, "The Iraqi government is studying a proposal to impose taxes on content creators on social media sites in the country, not users of those sites. This process came in order to enhance non-oil revenues, especially in light of the decline in oil prices and the deterioration in oil revenues. These taxes will provide good financial revenues, and for this reason the percentage will be 15% of the profits of content creators, especially since some of their profits are estimated in the millions on a daily basis."

He added, "This decision does not require a vote by the House of Representatives, as this is a decision within the authority of the Council of Ministers to expand the tax base, and does not require a law, but it is still under study, and may come into effect at the beginning of next year, as it requires months of work and study."

LINK

Q & A WITH MARKZ, 18 SEPT

 MarkZ  

 [via PDK]   I ...heard they [rates on bank screens] are changing and fluctuating. I am hoping this means they are priming the system again. My banking contacts say they are seeing many different rates…rates are rolling all over the place…Hopefully they are checking the system and priming the system….

Member: Is Zim still supposed to be in the first basket?

MZ: That is what I believe and what I hear from my best contacts…

Member: According to Militiaman the HCL is finished.

Member: Who gives Iraq permission to go???

MZ: At this point I believe it’s a compilation of the IMF, World Bank and the UN …but it is very confusing. The president of Iraq says it's up to the CBI now….But , if it’s up to the CBI I am thinking they would already have released it. 

Member: Mark- Do you believe the new lower denoinations have already been printed in Iraq?

MZ: Yes I do…We have seen the contracts years ago and the paid receipts from the government of Iraq with DeLaRue to print them…... Many contacts in Iraq have seen the cut sheets (samples of LD’s) in banks.

How Iraq's New HCL Law Could Boost the Iraqi Dinar in 2024! @DINARREVALU...