Supporting the Central Bank of Iraq: Enhancing framework conditions and promoting Financial Inclusion under the Team Europe Initiative
Financial inclusion is a key pillar of Iraq’s digital economy. Digital banking, mobile wallets and e-payments are transforming how Iraqis access financial services, fostering greater participation in the overall economy. These advancements benefit both individuals and financial institutions. For individual people, they provide more secure transactions, reduce the risk of counterfeit currency, and help build credit history for better access to loans. On the institutional level, they encourage financial service providers to develop inclusive products and extend their reach to currently underserved communities, opening new markets.
As Iraq continues its digital transformation, the adoption of digital payments is expected to streamline operations, enhance financial security, and drive economic growth. The Digital Payments Market in Iraq is projected to reach US$ 26.1 billion by 2025, with an annual growth rate of 24% from 2025 to 2029. Mobile POS payments will lead this expansion, reaching more than US$ 16 billion in 2025.
However, challenges remain, including the need to build trust in financial institutions, improve financial literacy, and expand access to services for vulnerable groups. Achieving financial inclusion requires both ensuring access to financial services and supporting institutions in developing inclusive products.
To address these challenges, as part of the Team Europe Initiative TAEUFIQ, GIZ and the CBI enhance financial inclusion and support fintech businesses. This collaboration aims to create a more inclusive and resilient financial ecosystem, contributing to Iraq’s broader economic development.
Financial Inclusion mission to Jordan
To gain insights from regional experiences, a CBI delegation visited Jordan to explore its financial market practices. The mission included meetings with key stakeholders, such as the Central Bank of Jordan, microfinance institutions and banks, to identify effective strategies for increasing financial inclusion. A key takeaway was the importance of conducting a comprehensive diagnostic analysis to better understand the market. Supported by GIZ, this study will form the basis for the CBI's national financial inclusion strategy, which will be launched soon.
Supporting financial innovation
Iraq’s financial sector is rapidly evolving, requiring adaptive regulatory frameworks that promote innovation while ensuring consumer protection. In response, the CBI is establishing a fintech unit to oversee a regulatory sandbox, allowing new financial solutions to operate in a controlled environment.
To support this initiative, GIZ conducted a mission to assess the CBI’s needs for developing this unit. Key recommendations included capacity building and adopting global best practices to enhance the unit’s development and drive Iraq’s digital financial transformation.
Training opportunities for CBI employees
GIZ Iraq partnered with the Cambridge Centre for Alternative Finance to provide specialised training for CBI employees. This collaboration offered courses in Fintech and Regulatory Innovation, as well as Open Banking and Open Finance. The courses allowed participants to develop the knowledge and skills to understand the regulatory and implementation aspects of open banking within a comparative context.
The partnership will continue in 2025, focusing on supporting the fintech unit and strengthening CBI employees’ capacity through both online and in-person training sessions. These efforts will enhance CBI’s ability to establish and manage an innovation-promoting structure, further advancing Iraq's financial landscape.
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These activities are part of the “Financial Inclusion for Economic Restart and Integration Project in Iraq,” commissioned by the German Government and co-funded by the European Union. This article was produced with the financial support of the European Union (EU) and the German Federal Ministry for Economic Cooperation and Development (BMZ). Its contents are the sole responsibility of GIZ and do not necessarily reflect the views of the EU or BMZ.