The Legal and Regulatory Framework for Microfinance in Iraq
Over the past few years, Microfinance Institutions (MFIs) in Iraq have emerged as credible sources of financing for low-income households and entrepreneurs, both underserved by conventional banks. Microfinance services in Iraq, however, are still n...
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| Language: | English en_US |
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Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2014/10/24082302/legal-regulatory-framework-microfinance-iraq http://hdl.handle.net/10986/21713 |
| Summary: | Over the past few years, Microfinance
Institutions (MFIs) in Iraq have emerged as credible sources
of financing for low-income households and entrepreneurs,
both underserved by conventional banks. Microfinance
services in Iraq, however, are still nascent and far from
meeting their full potential. Similar to many countries in
the MENA region, MFIs in Iraq were set up as
non-governmental organizations (NGOs) supported by a steady
influx of donor funding. While these NGOs were initially
able to grow through donor support, they are now struggling
to meet increasing client demand as donor resources have
dwindled, preventing them from making the necessary
investments in capital and infrastructure to meet growing
client demand. Many countries address this funding challenge
by allowing institutions to provide financial services as
companies or banks, helping them raise capital, provide new
services, and increase their outreach in a sustainable
manner. A similar path could be envisioned in Iraq, but is
currently obstructed by regulatory hurdles. This diagnostic
report aims to present and assess the current microfinance
landscape in Iraq, including the legal and regulatory
framework, recommend policy improvements to enhance the
sustainability and operating environment for MFIs and their
clients. This report argues that the current legal and
regulatory environment for microfinance in Iraq hinders the
growth and sustainability of the sector and furthermore
advocates several short and medium term policy
recommendations to enhance the overall operating environment
for MFIs, the sustainability of the sector, and impact for clients. |
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