A man in a suit holds a smartphone and a credit card in his hands in a bank, demonstrating a process to a woman, who is also holding a smartphone. © GIZ / Ali Al-Azzawi

Promoting financial inclusion in Iraq

Financial Inclusion for an Economic Restart and Integration in Iraq

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  • Client

    German Federal Ministry for Economic Cooperation and Development (BMZ)

  • Co-financier

    European Union (EU)

  • Country
  • Political sponsors

    More

  • Runtime

    2021 to 2024

  • Involved

    Iraq, Ministry of Planning (MoP)

  • Products and expertise

    Economic development and employment

An individual holding a credit card, getting ready to make a payment.© GIZ / Ali Al-Azzawi

Context

In Iraq, there is a widespread distrust in financial institutions like banks, leading many people to prefer cash transactions over credit cards or payment methods such as mobile wallets. This lack of trust also extends to savings accounts and loans, which are not commonly used. As a result, less than 20 per cent of adults in Iraq hold a bank account with a formal financial institution, according to the Global Findex Database, 2021.

Currently, less than five per cent of micro, small, and medium-sized enterprises use bank lending, The restricted access to loans can prevent businesses from growing because it limits their ability to invest in machinery, develop new products, or hire more staff.

Enhancing financial inclusion for businesses and vulnerable populations offers an important opportunity to boost economic growth and improve social well-being in Iraq.

Mehrere Personengruppen sitzen an verschiedenen Tischen, sind in ihre Arbeit vertieft und haben Papiere vor sich ausgebreitet.
GIZ / Bashaar Mohammed Ahmed

Objective

Vulnerable population groups and micro, small and medium-sized enterprises make use of financial services, such as payment services, mobile wallets, savings and loans.

Approach

The project employs a comprehensive strategy to achieve its objectives, focusing on:

  • Advising and empowering financial service providers to develop and market inclusive and innovative financial services.
  • Offering training programmes on financial literacy and raising awareness about tailored financial services for specific target groups.
  • Enhancing framework conditions by supporting the Central Bank of Iraq (CBI) to promote and regulate inclusive financial services.
  • Improving the conditions for women-led businesses to gain better access to financial services.

Last update: April 2024

 

Additional information