Economy News – Baghdad
The Association of Iraqi Private Banks and the Arab Gulf Program for Development (AGFUND) discussed the possibility of launching micro and microfinance programs in Iraq in the coming years in the presence of the representative of the Central Bank of Iraq, the senior advisor of the program, Badr al-Din Abdul Rahman, and private banks operating in the country.
This company aims to reach low-income classes and small projects in society, lend them to finance their projects or establish new projects, and enhance the concept of financial inclusion.
What is microfinance?
“Microfinance is the provision of financial and non-financial services to segments that have not been reached by such services, marginalized segments such as displaced people, disadvantaged, women, youth and the poor in general, and also includes insurance, micro-savings and remittances,” said Baddin Abdul Rahman, senior adviser to the Arab Gulf Program for Development, Badddin Abdul Rahman.
He adds that “large countries had experiences in this place, including Arab countries, and we in the Arab Gulf Development Program have been determined for many years to contribute to the microfinance sectors in Africa and the Arab world in the so-called innovation banks, in West and Central Africa, Jordan, Bahrain, Syria, Lebanon, Sudan and others,” stressing that “the program is ambitious and we have harnessed many resources to build microfinance in these countries in terms of financing, training, policy development and correcting erroneous concepts about microfinance in the Arab world.”
Cooperation Agreement
Badr al-Din explains that his visit to Iraq came “in order to activate an agreement between the Arab Gulf Program for Development (AGFUND) and the Central Bank of Iraq, which includes the preparation of a strategy for micro and microfinance over the next five years, in relation to the Central Bank and the effective institutions in micro and microfinance to launch in this sector in the wider horizons and address many outstanding issues in the finance sector and understanding microfinance.”
He expressed his hope that “the agreement will include providing programs in financial education and preparing trainers in financial education, to correct the concepts of workers in this sector and microfinance customers, as well as establishing a large company in which the Arab Gulf Development Program, government and private banks, the Arab private sector and Iraqi contribute in this regard.”
How much is the company’s capital? What are the ways to finance it?
As for the company’s capital, Abdul Rahman states that “the Central Bank of Iraq has put an amount of $ 600 thousand to two million dollars, and we are talking about much larger capital than that and we discussed this, but we have not reached a result because the capital is a calculation that depends on partners, and in general we expect to be at least between five and ten million dollars. As a beginner and then they will start.”
As for the financing method, “it depends on social investment and works with the commercial return system in the country, and takes wholesale financing from banks, funds and foreign destinations as well. All profits are reinvested in the form of infrastructure and branches and are not taken and returned again to the program. It is also financed from investments that come from the local or foreign private sector or investments that come from banks.” According to the economic adviser.
A new experience
Badr al-Din Abdul Rahman hopes that “these sessions, discussions and strategies that we help the Central Bank to prepare, and these programs are in comprehensiveness and financial education, as well as the misleading agencies that provide services to microfinance, we aspire to establish a misleading agency in Iraq that pushes the microfinance sectors, which we see is still small and has some problems, but with comprehensive cooperation, we expect that in the coming years a small finance sector based on global bases and that financing will turn from a profitable subsidized and with a high repayment rate, especially in moving towards the countryside and projects that have not been covered so far.”
He pointed out that “this method is capable of transferring the initiative to Iraq, which depends on social investment, social guarantees and achieving sustainable development goals in the form of micro and microfinance programs such as kindergartens, education programs, programs in the small-scale agricultural sector, and everything that is under the scope of the United Nations Sustainable Development Goals.”
Abdul Rahman concluded that he is “optimistic and happy to come to Iraq and to provide these services and transfer the experiences we have taken from Africa and the Arab world to Iraq and we wish success and create good opportunities for young people and women and deprived of financial services in the form of policies, financing, insurance, guarantees or others.”
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Added 2022/04/11 – 11:50 AM
