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Achievement Awards for Microfinance Professionals Mark the Successful Conclusion of the 3rd Microfinance Partners Workshop

The Third Iraq Microfinance Partners Workshop, organized on November 17 by the USAID-funded IZDIHAR project, brought together over 70 microfinance professionals and practitioners from all over Iraq in a forum to assess the progress of the industry and debate major issues relevant for its ongoing development.

The lively debate sparked by the presentations made to the workshop focused on issues that ranged from financial transparency to sustainability and increased cooperation between microfinance institutions and the Small Business Development Centers (SBDC). Particular attention was given to the possibility that the MFIs and the SBDCs work together to launch a new microfinance product, the “start-up loan,” requested by many Iraqi entrepreneurs that attended the courses provided by the business development centers.

One happy indication that the industry has grown and matured was the ceremony in which the staff of the international and indigenous microfinance institutions (MFI) operating in Iraq were honored, for the first time, with performance awards.  The Director of the USAID Mission in Iraq, Mr. Christopher Crowley, personally awarded the certificates that acknowledged, among others, the “Best Performing Loan Officer” and “The Best New Entrant to the Iraqi Microfinance Industry”.
 
“Microfinance in Iraq has greatly improved since last November, when we participated in the first National Microfinance Summit,” said one of the keynote speakers, Ms. Lene Hanson. “The industry is much more mature now and the level of professional debate is definitely higher than last year,” said Ms. Hanson, currently Chief of Party of a World Bank Microfinance project in the West Bank.

Since November 2006, three new indigenous institutions joined the microfinance family in Iraq. Between November 2006 and October 2007, the amount of the loans disbursed by all microfinance institutions operating in the country grew from 39,173 loans worth $78,844,339 to 62,460 loans worth $131,376,528.

“This workshop was instrumental in taking stock of progress since the MF Summit held at the same time last year; and it marks a turning point, one that will allow for a re- alignment of programmatic interventions that will ensure the sustainable growth of the industry in the coming years”, said Mr. Vohra, Chief of Party of the IZDIHAR project.

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The Fallujah Branch of “Al-Takadum” Microfinance Institution Makes First Loans

14 December 2007 - After the successful opening of its main office in Al Qaim in August, the Iraqi microfinance institution “Al Takadum Organization in Al Anbar” moved on to expand its operations and opened a second office in Fallujah. On November 15, the Fallujah branch of the organization disbursed the first two loans - one for home improvement, one for the development of a clothing shop - totaling $4,000. One week later, on November 22, the number of disbursed loans reached 14 and totaled to $32,200.

The Fallujah branch of “Al Takadum” operates on the Islamic lending principles, known as Al Murabaha. The office employs a staff of seven and opened for business on November 3. “Borrowers could not believe their eyes. They were thrilled to have working capital to buy inventory and repair their homes. They were also content to have the local Fallujah religious leaders making it ‘halal’”, said “Al Takadum”’s local Branch Manager in the city. 

The establishment of the office in Fallujah is the result of the successful cooperation of the USAID-funded IZDIHAR project and the US Military. IZDIHAR trained the staff, provided the loan capital and technical assistance in setting up the policies and procedures, while the US Military covered the refurbishment and equipment costs.

Since its inception in August until the end of October, “Al Takadum”’s main office in Al Qaim has lent $194,450 to 85 borrowers. The organization is planning to open soon a third office in Ramadi.

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Iraqi Microfinance Institution Disburses First Loans in Salah ad Din 

27 November 2007 - A new, indigenous microfinance institution in Salah ad Din established with the support of the USAID-funded IZDIHAR project vigorously kicked off its lending activities on November 11 when it disbursed 13 loans totaling $35,600. The recipient of the first loan was the owner of an electrical components shop, who borrowed $3,000 to purchase additional inventory for his business.

In total, eight loans went to the development of small businesses and five were targeted for home improvements. Three of them were awarded to female borrowers. The business loans cover activities ranging from a tailoring shop to a cosmetics store and a medical laboratory. The borrowers are residents of two cities of the governorate – Tikrit, where the main office is located, and Alam.

“I am very happy because our hard work finally paid off”, said the Manager of the new microfinance institution.  “When we disbursed the first loan, people could not believe their eyes. But as they saw it happen for real, this resulted in a great demand for our loan products, which made me even happier.  This is a major accomplishment for our small institution, and I wish this activity continues as it will help decrease the insurgency in Salah ad Din. I want to extend my gratitude to IZDIHAR for its efforts in supporting our institution”, said the Manager.      

The establishment of the new microfinance institution was a joint effort of the USAID-funded IZDIHAR project, the Provincial Reconstruction Team (PRT) in Salah ad Din and the US Military. IZDIHAR assisted the microfinance institution – initially registered as a non-governmental organization - in changing its by-laws to accommodate the microfinance activities. It also provided extensive training to the staff, helped set up the policies and procedures of the institution and provided loan capital.

The new microfinance institution officially opened for business on October 31st, only 11 days before it awarded the first loans. The institution currently has six staff members and is planning to expand by opening four satellite offices in Bayji, Al-Dhlouiya, Dujayl and Al-Dour.

It is the fourth Iraqi indigenous microfinance institution established by USAID through the cooperation of IZDIHAR with the US Military and the PRTs.

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New Iraqi Microfinance Program Opens for Business in Salah ad Din

11 November 2007 - In October, a new Iraqi indigenous microfinance program began providing access to funding to local entrepreneurs in Tikrit, the capital city of the Salah ad Din governorate. Soon it will expand and open satellite offices in four other districts of the governorate: Bayji, Dujayl, Al-Dhlo'ya and Al-Dour.

The program is managed by a local non-governmental organization whose by-laws and governing bodies were adapted to match the needs of a microfinance institution. In August, the NGO Board identified and selected candidates for the staff of the program, who were trained in September by representatives of the USAID-funded IZDIHAR project.

The training, organized in Tikrit, was very well received and highly valued by the 31 participants.

“Being from Ad Dujayl, Bayji, Tikrit and Ad Dawr, the attendees represented a wide geographic and social spectrum. They described the IZDIHAR staff as the best trainers they had ever experienced”, said a representative of the Provincial Reconstruction Team in Salah ad Din in a letter of commendation addressed to IZDIHAR. The PRT initiated the establishment of the microfinance program and has cooperated with IZDIHAR in making it possible.

“It was useful and properly organized. The course quality was excellent. The best thing that I got from it is how to give a loan and how to assess the borrower”, said one of the participants. ” The course was very clear, direct and simple. I got important and valuable information from the training. This is the first time that I have a clear idea about microfinance“, said another.

Six of the trainees were recruited and employed for the main office on the new microfinance program, renovated and refurbished with the support of the US Army. IZDIHAR will provide them with further training on credit, human resources and other policies pertaining to the good functioning of a microfinance program.

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Newly Established Iraqi Microfinance Institution Awards First Loan in Al-Anbar

17 September 2007 - A select gathering of over 50 people, including local sheiks, religious leaders, local administration officials and business people, recently participated in the official opening in Al-Qaim of a newly established indigenous microfinance institution – the “Al-Takadum Organization in Al-Anbar”.

It was a major event that enjoyed the strong support and boosted the pride of the community. “This is a very important achievement for Al-Qaim, because it will help develop the local community and increase trade”, said one of the local sheiks that attended the opening ceremony.

On August 21st, the day of the opening, the Imam of Al-Qaim issued a “fatwa” (religious decree) authorizing the functioning of the microfinance institution according to Islamic lending principles. On the basis of the fatwa, the Mayor of the City of Al-Qaim, who cut the ribbon at the opening ceremony, wrote an official letter to all the residents of the city describing the way the “Al-Takadum” microfinance institution will operate.

On Friday, August 24th, the validation that the fatwa is “halal” (acceptable) was announced in all mosques of the city and the residents were encouraged to borrow from the microfinance institution. The leaders of Al-Qaim emphasized that they regard the establishment of “Al-Takadum” as a well-deserved reward, since the local tribes succeeded in uprooting the insurgents and securing the city by themselves. 

The new institution awarded the first loan – worth $2,000 - on the day of the official opening to the owner of a mobile phone shop, who is seeking to expand his business. The staff of “Al-Takadum” already received thirty loan applications, out of which fifteen were approved.

The establishment of the new institution in Al-Anbar is the result of a remarkable joint effort by the USAID-funded IZDIHAR project, the US Military and the Provincial Reconstruction Team in Al-Asad.  Since the official legal registration of “Al-Takadum” on July 9th, several IZDIHAR staff members traveled to Al-Qaim to identify, recruit and train the staff and help establish operational policies and procedures for the effective functioning of the institution.

“The experience of visiting the cities of Al-Anbar where the new microfinance institution will be functioning was humbling, especially to drive around and see the extent of the destruction caused by the insurgency”, saidIZDIHAR’s Chief of Party.  “The main focus is now to get people back to open their shops.  We are strongly committed to make this happen quickly, then gradually extend the activity of the new institution to cover the main cities of Al-Anbar.”

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The Website of the Iraqi Microfinance Industry Goes Live

14 August 2007 - A new website dedicated to the Iraqi microfinance industry - www.imfi.org – offers information on upcoming events, resources, training and employment opportunities, and acts as an informal network for the microfinance industry in Iraq.

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New Indigenous Microfinance Institution Will Open in Al-Anbar 

14 August 2004 - The network of microfinance institutions active in Iraq will soon expand into new areas, as preparations for the opening of the Al-Takadum microfinance institution in Al-Anbar province move into the final stage.

The new microfinance institution will commence operations with a staff of six and is expected to open for business in late August.  The staff was recruited and trained by the USAID-funded IZDIHAR project and the building that will host the office has been undergoing renovation.  The loan capital will be provided by IZDIHAR and the operational capital will come from the US Military MNF-W CERP funds.

“We are pleased that Al-Takadum will soon open for business and will start awarding micro and small loans to the communities it serves.  The opening of a new, indigenous microfinance institution illustrates our strong commitment to the development of the private sector and our desire to encourage and support the entrepreneurial spirit of Iraqi people”, said Baljit Vohra, IZDIHAR’s Chief of Party.

The mayors of other Iraqi cities have also expressed strong interest in hosting local offices of Al-Takadum.

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Operational Assessments for Microfinance Institutions

14 August 2007 - As part of the overall technical assistance to indigenous and international microfinance institutions active in Iraq, the USAID-funded IZDIHAR project recently completed operational and financial assessments for the Ninewah Business Center and Relief International.  The assessments consisted of a thorough review of policies and procedures, of the loan tracking and accounting system, of their financial statements and loan portfolios. The assessments were complemented by recommendations that will be part of the milestones the microfinance institutions need to achieve in order to get additional funding.

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First Iraqi Professionals Receive Certification in Microfinance Training

5 July 2007 - In a recent graduation ceremony in Erbil, 11 Iraqi microfinance professionals stood up one by one, smiled happily and walked proudly to receive the diplomas acknowledging that they are the first Iraqi nationals certified to deliver microfinance courses in Arabic.  The ceremony took place during the Second Microfinance Workshop for Partners and Practitioners organized by the USAID-funded IZDIHAR project.

The event held major significance for the 11 trainees - three women and eight men – who had undergone rigorous training and invested many hours of study and preparation to obtain the certification.  In addition, each of them was required to deliver two training sessions in their area of specialization.

“This certificate will help me improve professionally, academically and financially.  Microfinance is new to Iraq, and I am fortunate to have learned about this field.  Besides, I always dreamed of opening a consultancy on accounting and auditing standards.  With the knowledge and experience that I gained in this course I now feel ready to start such a business”, said a woman who was the top performer among the 11 graduates and was awarded a special USAID/IZDIHAR commemoration plaque.

Certification of the 11 Iraqi microfinance professionals comes from CGAP-Sanabel.   CGAP (Consultative Group to Assist the Poor) is a consortium of 33 public and private development agencies working together to expand access to financial services for the poor in developing countries.  Sanabel is a regional network for microfinance institutions (MFIs) in the Middle East and North Africa (MENA) region whose members collectively serve more than 90% of the total active microfinance clients.  It is the only authority certifying microfinance trainers in the Arab world.

The intensive CGAP Training of Trainers Program completed by the 11 trainees included six essential subjects: Delinquency Management, Accounting, Financial Analysis, Human Resource Management, Product Development and Operational Risk Management.

Providing training to the microfinance institutions (MFIs) has been one of the key commitments of the USAID-funded IZDIHAR project since its inception.  The project has also provided grants for operational and loan capital for the MFIs, as well as technical assistance for indigenous microfinance institutions.

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IZDIHAR and Provincial Reconstruction Team in Kirkuk Facilitate New Source of Loan Funds for Iraqi Small Businesses

1 July 2007 - An Iraqi woman who started a business in tailoring two years ago and wants to expand it by purchasing a sewing machine is the first recipient of a loan facilitated by a new source of funding for Iraqi small businesses: Kiva. It is an organization that facilitates access to capital by brokering loans from people all over the world to micro-entrepreneurs in economically challenged countries.

Fatima is a 55-year-old mother of three girls, whose husband died two years ago in a terrorist attack in Kirkuk. She applied for a $1,200 loan from Al-Aman, an indigenous Iraqi microfinance institution. Thanks to an initiative taken by the Provincial Reconstruction Team in Kirkuk, Al-Aman was recently accepted as a partner to receive loans from Kiva. The USAID-funded IZDIHAR project made the partnership possible by conducting, at Kiva’s request, an audit and an assessment on Al-Aman.

Less than two hours after Al-Aman posted Fatima’s story on Kiva’s web site, 31 lenders from five countries joined forces to lend the full amount that she had requested and her loan was funded. “We are very pleased at having facilitated this loan”, said Al-Aman’s Executive Director, “we are looking forward to expanding our cooperation with Kiva, for the benefit of the local entrepreneurs in Kirkuk”.

Al-Aman is a non-governmental organization that was established with financial support from IZDIHAR - for its loan capital - and from the US military for its operations capital. Based on the successful cooperation with Al-Aman, Kiva will develop new partnerships with other microfinance institutions operating in Iraq. IZDIHAR will assist Kiva by conducting audits, upon its request, as well as an assessment of borrowers on a monthly basis.

Kiva has pledged to raise $15,000 in loan capital every month for Al-Aman’s micro-entrepreneurs. 

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Iraqi Microfinance Institution in Kirkuk Expands Operations

30 June 2007 - As part of its expansion plan, the Al-Aman Iraqi indigenous microfinance institution, established in Kirkuk by the USAID-funded IZDIHAR project, opened a second office inside the main market of the city in May 2007.  Al-Aman itself trained three new loan officers, and the new office has already received five funding applications and disbursed one loan.

“The opening of the new office is our response to the demands of the community.  It will be serving small businesses from the same sectors as the main office – trade and services.  We expect the loan applications submitted to the office to increase by ten applications each month,” said Hussien Abdul Kareem, Al-Aman’s Executive Director.

The microfinance institution started operations on July 15, 2006, with an initial loan capital of $250,000, granted by the USAID Mission in Iraq through IZDIHAR.  Since then it has awarded 138 loans – of which 34 were disbursed to women-owned businesses.  By the end of April 2007, four loans were fully repaid.  Al-Aman aims at awarding 350 loans this year and maintaining a 100% repayment rate.

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Iraqi Microfinance Industry Reaches Historic Benchmarks

25 June 2007 - The vibrant microfinance industry in Iraq reached several historical benchmarks in May, illustrating the energy and determination of the indigenous and international microfinance institutions that have been operating in the country.

The total number of loans disbursed by the five existing microfinance institutions (MFIs) since the inception of the activities surpassed 50,000 (actual number = 50,142).  The total value of loans disbursed exceeded $100 million (actual amount was $103,673,489).  In May alone, the value of the loans disbursed in one single month topped $5 million (actual amount was $5,650,350).  The total number of active clients benefiting from microfinance loans went beyond 18,000 to reach 18,611.

“Our work makes a difference. The microfinance loans, albeit small, are helping people start or expand businesses that enable them to provide for their families”, said the Executive Director of Al-Aman, an indigenous institution based in Kirkuk.

The network of active microfinance institutions – two indigenous and three international – is currently covering 17 Iraqi governorates. Plans are in place for a new indigenous institution to be established soon in Al-Qaim (Al-Anbar governorate) with the support of the USAID-funded IZDIHAR project.

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Newly Trained Iraqi Loan Officers To Expand Microfinance Services in Baghdad

20 March 2007 - As a future loan officer of an indigenous microfinance institution based in Baghdad, Manar, a 27-year-old female, has an ambition: to assist in the economic development of her country. "Microfinance loans are new to our country and will help people start and develop businesses and live a better life, after 35 years of oppression", explains Manar.

Manar is one of 18 proud graduates of the Microfinance Basics course organized by IZDIHAR, a USAID-funded program focused on private sector development.  Like Manar, her colleagues – who come from different neighborhoods of Baghdad - are keen to support small businesses from their districts with much needed capital.

"Microfinance loans target poor people from our communities who cannot access bank loans – blacksmiths, tailors, carpenters, etc.  Our roles will be very helpful, as the loan recipients will be able to earn income for themselves and their families", says another graduate.

"You are the most important people in Iraq now", Kent Larson, USAID Mission Liaison Officer for the Baghdad Provincial Reconstruction Team, told the new graduates.  "There are a lot of people looking for jobs, but they can only get them if we build businesses. And this is what you will be doing as loan officers."

Ten of the eighteen graduates will immediately start working as loan officers for the Baghdad-based microfinance institution, which has been operating since August 2006 and is currently covering two city districts – Karrada and Mansour.

With the new staff, the institution will expand its network and offer microfinance loans in eight of Baghdad’s nine districts.  It plans to soon cover the entire capital and perhaps extend operations nationwide.

IZDIHAR developed this local microfinance institution in close cooperation with the US Military, which provided operating capital and identified potential loan officers to course organizers.

"We have been working with partners across Iraq to provide microfinance loans to small businesses, as part of our support for private sector development", said Greg Howell, USAID’s Global Development Alliance Advisor.

"With so much business conducted in Baghdad, we hope to expand the availability of microfinance loans to illustrate our strong commitment to economic growth and job creation in the city."

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Iraqi Women Advocate for Increased and Effective Role in Business

12 February 2007 - In late January, over 60 enthusiastic women representing NGOs, businesses and government packed into the Al Rasheed Hotel for “Women in Business: A Promise for Economic Progress,” a conference organized by the USAID IZDIHAR project.

Participants engaged in a lively debate over access to small business loans, NGO registration processes, gender equality, business planning, microfinance and related issues relevant to Iraqi women entrepreneurs.

Encouraging women to seek entrepreneurship as a means to economic self-sufficiency, an IZDIHAR senior advisor who delivered the keynote speech said, “For women, business ownership represents power, potential, promise and progress.”

A defining moment in the conference came during the presentation by the executive director of the a small business development center in Hilla. She shared her experiences running an association that provides consulting and training for local business people.

A top advisor to the State Ministry for Women Affairs made a passionate plea for an increased and effective presence of Iraqi women in business. She emboldened women to look at increasing their participation in the bidding and contracting process. She reminded attendees, “Don’t be intimidated! Start your business now.”

In a presentation on micro-credit, an IZDIHAR expert on microfinance isses gave an overview of the microfinance industry in Iraq. She introduced the audience to the five microfinance institutions (two of them indigenous) currently operating in Iraq and informed participants about various technical aspects such as rates and application process.

The presentation on NGO registration by the representative from the State Ministry of Civil Society sparked the liveliest moment of the conference. Following his presentation, the room erupted with questions relating to the difficulty of registration, the confusion swirling around existing laws and failure to implement recent laws.

At the conclusion of the conference, the IZDIHAR microfinance expert comments, “The event was engaging as there was a lot of dialogue with powerful and educated women who are not afraid to speak up. They spoke from their hearts and want to make changes in their lives, their families and their communities.”

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Summit Outlines Strategies for Microfinance Industry in Iraq

21 November 2006 - The Iraq National Microfinance Summit organized by the USAID-funded IZDIHAR project on November 14-15 turned Erbil for a couple of days into the capital of the microfinance industry in the country. Over 100 participants gathered in an intense and thorough debate over the role and importance of microfinance in economic development and job creation in Iraq. The audience included Iraqi and international microfinance practitioners, private sector partners, government officials, international financial institutions and representatives of USAID.

“The Summit for the first time brings together all the stakeholders to take stock of the industry as it exists today”, said IZDIHAR’s Chief of Party in the opening speech of the Summit. “Microfinance, as defined in Iraq, creates employment and self-employment opportunities. We look forward to the deliberations of this summit helping to outline a strategy for this sector that will lay the foundation for a thriving microfinance industry in Iraq”.

The event was organized in seven working sessions, with topics ranging from “Developing Local Iraqi Microfinance Institutions” to “Microfinance Practice” and “Strategies to Support the Iraqi Microfinance Industry”. The collegial and practical debates shed light on a wide range of issues. The presentations and the discussions illustrated the global trends in microfinance, clarified the specific traits of microfinance in Iraq, and highlighted the challenges and opportunities that the sector is facing.

“Given the unique environment in which microfinance institutions operate in Iraq, there are no real precedents to draw on for guidance. This Summit assisted donors in formulating practical programs with realistic expectations for microfinance in Iraq”, said a representative of the USAID Mission.

New!
Visit our Resources/Events section for background information on
the first Iraq National Microfinance Summit.

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Iraq National Microfinance Summit Sets Strategic Course for Microfinance Sector in Iraq

13 November 2006 - In November, IZDIHAR is bringing together for the first time, in one forum, supporters and practitioners of microfinance in Iraq.  The Iraq National Microfinance Summit will enable information sharing among practitioners of the nascent indigenous microfinance sector and will foster greater awareness of international best practices.

The event will support the indigenous microfinance institutions and the international NGOs that have benefited from USAID grants through IZDIHAR and will facilitate an ample professional dialogue that will result in the development of a comprehensive “Iraq Microfinance Strategy”.  The document will set the course for the future contribution of the microfinance sector to the development of Iraq.

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Indigenous Microfinance Institution Reaches Out to Businesswomen

6 November 2006 - As part of its outreach efforts, a USAID-funded microfinance institution in Kirkuk organized four training sessions for local businesswomen to train them on microfinance in general and to familiarize them with lending procedures. The training was organized in cooperation with a local NGO which focuses on women’s issues.

Their combined efforts paid off: about 30 local women entrepreneurs attended the sessions and five of them submitted loan applications.  “We are pleased to see such a positive reaction”, said the Executive Manager of the organization.  “When we started the training they were against the idea of borrowing money to develop their businesses.  Now they come and ask for loans”, said the manager.

The Loan Committee recently approved the third loan to a business operated by a woman and disbursed the money. As of October 16, the organization has awarded 27 loans totaling a portfolio of $ 68,569 since opening in August 2006.

The organization is one of three indigenous microfinance institutions that USAID has supported with training, technical assistance and grants for loan capital through the IZDIHAR project. USAID is also assisting three international NGOs which are providing microfinance loans in Iraq.

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New Microfinance Organization Opens in Baghdad

In September, an independent new Iraqi microfinance institution (MFI) officially opened its doors for business. Supported by technical assistance to develop a business plan, recruit and train a Board and employees, and officially register, and by a $250,000 grant from Izdihar, the MFI will provide long-term access to a broad range of financial services to low-income individuals, households and business owners in a particularly dangerous area of Baghdad.

The mission of IZDIHAR’s program and of this new MFI is to help male and female micro entrepreneurs and business owners strengthen and expand their businesses, stabilize their incomes, create and sustain jobs, and contribute to the overall economic revitalization of Iraq. The MFI’s activities will address the need for broader access to credit and provide opportunities for a diverse range of business activities.

The main objectives are to increase access to financial services for micro and small businesses owners, stimulate and promote women owned businesses, and create a financially sustainable organization.

IZDIHAR is assisting this organization to:

• develop transparent and efficient credit processes and procedures;
• provide loans with flexible terms and conditions;
• target both male and female clients;
• develop a geographic expansion strategy that targets new areas and a large number of working poor;
• build customer loyalty through good service and by developing products that meet demand;
• maintain a high repayment rate among borrowers and high portfolio quality to ensure program success and financial sustainability;
• charge fees that allow the program to sustain its operations;
• build local community support for microfinance services;
• recruit staff from the target/geographic area to ensure familiarity with the area, communities, clients and potential clients;
• obtain a thorough understanding and knowledge of the applicant’s background before providing loans;
• develop local staff capacity;
• build a relationship of mutual respect between employee and management to encourage employee loyalty and reduce employee turnover;
• implement a new incentive system to motivate loan officers to expand outreach activities while maintaining high repayment rate and portfolio quality;
• develop and maintain a comprehensive Management information system with capacity to keep track of a large database of disbursed loans; and
• continually develop and improve its products based on field experience, client needs and MFI best practices.

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New Iraqi Microfinance Lenders Gain Practical Experience

25 August 2006 - Twelve management and staff members of two new Iraqi microfinance institutions (MFIs) recently attended a training program in Amman on microfinance fundamentals. The training laid the foundation for skills that will enable Iraqi staff to successfully operate their institutions to the benefit of small Iraqi businesses.

The program focused on designing and marketing MFI products, loan and credit processes, operational structures and customer service. The agenda also included field visits to small businesses and “hands-on” working sessions at two branches of the National Microfinance Bank of Jordan.

Developed with the technical assistance of the USAID-funded IZDIHAR project, the microfinance institutions will provide much needed capital to hundreds of Iraqi small entrepreneurs, helping them to grow their business and create new jobs.

Another indigenous Iraqi microfinance institution, based in Kirkuk, recently disbursed the first cash flow based loans to local small businesses.  Several other MFIs are expected to start operation this fall.

According to IZDIHAR director Khalid Al-Naif, “the creation of indigenous microfinance institutions is crucial to the development of Iraqi small businesses.  The loans they will provide will help in the development of the local economy and will generate hundreds of new jobs.”

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New Microfinance Institution in Kirkuk Helps Small Businesses to Recover and Grow

27 July 2006 – A pharmacy damaged in a terrorist incident in Kirkuk will be the first business to benefit from a new, indigenous microfinance organization established through a successful partnership between the USAID-funded IZDIHAR project, the US Military (MNC-I C9) and the Provisional Reconstruction Team (PRT) of Kirkuk.

A few months ago, a terrorist incident in Kirkuk destroyed most of the stock of a local pharmacy, leaving a family-owned business in shatters and depriving the community of much needed medication.  The functioning of the pharmacy and its service to the community will soon be fully restored, as in mid-July the family took a loan - the equivalent of $3,000 in Iraqi dinars – to replenish the stock and rebuild the business.  As small as it seems, the loan will have a big impact on the business and the community it serves.

Small businesses from Kirkuk and the neighboring area that would normally have difficulty obtaining bank loans may now be eligible to borrow small amounts of money to finance their operating expenses or purchase new equipment. At present, Iraqi banks typically require real estate as collateral, whereas the new microfinance institution provides loans based on cash flow.

Through IZDIHAR, a project for developing the private sector in Iraq, USAID granted the sum of $250,000 to form the microfinance institution’s initial loan capital and provided training for its staff. The loans - in the range of $2,000 to $5,000 - are geared toward working women entrepreneurs and are expected to create several hundred new jobs. In the first week of operation, the staff interviewed 13 applicants, approved three loans (one for a business owned by a woman) and closed two of them, which may generate nine jobs.

This pilot microfinance organization will serve as a model for two similar microfinance institutions located in Baghdad and Falluja that will start operating soon, and may inspire the banking sector to gradually move towards cash flow lending by demonstrating the benefits of lending to small businesses.

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US Military Supplements USAID Assistance to Microfinance Institutions
1 July 2006 - One of the Iraqi microfinance institutions established through the support of the USAID-funded IZDIHAR project recently signed an agreement with the US Military, which will provide the funding necessary to cover initial operating expenses.

The assistance will help to ensure the smooth functioning of the institution until revenue generated from the microfinance business enables it to fully cover its own costs.  The initial loan capital base of the microfinance institution was established through a $250,000 grant from the USAID IZDIHAR project.

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Microfinance Loans Flowing to Baghdadis

11 May 2006 – Entrepreneurial Baghdad residents soon will benefit from a USAID-funded $250,000 microfinance loan program designed to help develop or expand small businesses that create jobs in Iraq. 

An Iraqi non-governmental organization will evaluate applicants and distribute the loans, typically up to $5,000, to Iraqis living in a community where many citizens are currently unemployed due to the dismantling of the former Iraqi army.  The program also will focus its lending activities on providing business opportunities for women and other disadvantaged groups.

USAID’s private sector development project, IZDIHAR, is working with Civilian Military Operations officers of the Multi-National Force - Iraq (MNF-I) to provide support and training for the Iraqi microfinance organization.

The $250,000 microfinance loan capital is expected to result in at least 660 loans generating 330 new self-employment opportunities and more than 1,320 new jobs over the next 16 months.

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TV Series Profiles Small Business Owners Finding Success in Iraq

2 April 2006 – Eighteen Iraqi small business owners from throughout the country were recently profiled in a three-week prime time series on Al-Iraqiya television. 

The series, called “Nahwa Al-Izdihar,” which means “Toward Prosperity,” consisted of five-minute interviews following the nightly economic news with businessmen who are finding success in Iraq’s growing private sector and showing others that there is hope in the future. 

When asked about the obstacles to doing business in Iraq today, a hotel owner with plans to open a new riverfront facility replied, “As you know, the bad security situation is the first obstacle.  But my determination to serve my country’s people has helped me overcome these obstacles.”

“I was an employee for a long time,” said one businessman when asked about the differences between working in a government job and Iraq’s private sector.  “I prefer the private sector in order to develop the country and urge its people to depend on themselves but not depend on the government.”

The head of an oil products distribution company offered advice for those who are thinking about establishing a business in Iraq.  “I call on all our brothers who are now outside the country to return and start investing inside their mother country because the future will be here.”

Al-Iraqiya satellite television is one of the most popular channels in Iraq and can be seen throughout the country.

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14 Iraqi Provinces to Benefit from USAID Microfinance Grants

9 March 2006 – USAID’s IZDIHAR project recently awarded $8.9 million in grants to three international non-governmental organizations (NGOs) to help build a sustainable microfinance industry in Iraq.

The grants, each for approximately $3 million, will help build the capacity of Iraqi microfinance institutions in 14 of Iraq’s 18 provinces.  Two of the recipients already have existing operations in Iraq.

The NGOs will provide loans to start up or expand small businesses in order to create new jobs in Iraq.  Microfinance loan amounts typically range from $250 up to $25,000 and enable low-income or otherwise disadvantaged individuals to access small amounts of credit that are not usually provided by banks.

As a result of the grants, the NGOs will train Iraqi institutions in management and credit practices so the local organizations can become sustainable and profitably manage the loan portfolios for years to come.

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USAID IZDIHAR Briefs Military Civil Affairs Officers on Microfinance Techniques

6 November 2005 - Staff from the USAID IZDIHAR project recently provided a week of briefings in Baghdad in microfinance techniques for eleven military civil affairs officers who will be part of a pioneering USAID-DOD partnership to expand access to business loans for start-up companies in Iraq.

The civil affairs officers, tasked to the Multi-National Force – Iraq (MNF-I), will employ microfinance industry strategies to identify local business associations and other membership organizations that will receive seed money to provide loans of $1,000 to $25,000 for their members.

The partnership utilizes the military’s on-the-ground capabilities and local relationships in combination with USAID’s technical training and loan capital to expand the private sector and create new jobs in Iraq.

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Iraqi Small Business Owners Attend Microfinance Seminar

24 October 2005 - The USAID IZDIHAR project recently teamed with the Multi-National Force–Iraq (MNF-I) to present a seminar on microfinance loans and business plan development for 40 small business owners in central Baghdad.

Sponsored by the local chamber of commerce, this groundbreaking event was an important first step on the path of economic development for small businesses in the area.

Baljit Vohra, Deputy Chief of Party for the IZDIHAR project, discussed small business loan criteria and noted, “There are eight banks in and around Baghdad that have already lent a combined $2.26 million to local businesses in Baghdad since the fall of the old regime in 2003.” 

The same banks, according to Vohra, are continuing their efforts to encourage the growth of local small businesses by transitioning from a conservative collateral-based loan system to a more aggressive system based on the cash flow generated by a business.

Major Carlos Molina, a civilian military operations officer from A Company, 425th Civil Affairs Battalion and an international business consultant when he is not deployed, addressed the importance for small companies to have a business plan and described techniques that companies could use to develop their plans>.

Molina also stressed the need for entrepreneurs to present a good business plan to banking institutions as part of the loan application process.

Attendees expressed their thanks for the event, which prompted one small business owner to remark, “The strategy and insight provided today will help me finance and achieve my business objectives."

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IZDIHAR and MNF-I Civil Affairs Work Together to Bring Access to Credit for Small and Medium Enterprises in Iraq

19 September 2005 - USAID’s IZDIHAR project and the Multi-National Force – Iraq (MNF-I) recently met in Baghdad to cement a relationship that will bring greater access to credit for small and medium enterprises throughout Iraq.

The pioneering microfinance program combines USAID’s financial, technical assistance and project management resources with the MNF-I’s CERP (Commander’s Emergency Relief Program) funds for project start-up and on-the-ground personnel who can identify local membership organizations that will form the basis of a non-bank financial industry in communities outside of Baghdad.

“This partnership takes advantage of the core competencies of both the military and USAID,” said New York National Guard 42nd Infantry Division Captain Dan Rice, who is tasked to the MNF-I and is a bank vice president in his civilian life.

“We in the military have security and local relationships,” he continued. “USAID has the technical training and the loan capital. By partnering together, we can provide the Iraqi people with better support and the American taxpayer with a lower cost system.”

Sean Jones, Director of the USAID/Iraq Office of Economic Growth, added, “The partnership of USAID IZDIHAR and the MNF-I is an important step in helping to strengthen the private sector and create more jobs in Iraq.”

Funds distributed to qualified membership organizations will become seed money to provide sustainable microfinance loans, typically $1,000 to $25,000, to small and medium sized enterprises that are seeking capital to grow their businesses and generate new employment.

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Iraqis Receive Training in Microfinance

31 July 2005 - The USAID IZDIHAR project recently sponsored six representatives from three Iraqi-based non-profit organizations to attend Microfinance Practitioner Training in the United States at Southern New Hampshire University’s Microenterprise and Development Institute.

The training was designed to help the representatives move their organizations toward sustainability by improving their abilities to evaluate and manage small business loans for creditworthy enterprises. It also will help raise their management capabilities to international “best practices” standards.

By enhancing their skills through training, these representatives will be better able to professionally manage the non-bank microfinance institutions that will provide working capital loans to small businesses and farmers so they can grow their enterprises and create jobs in Iraq.

By the end of this year, representatives from these three organizations will have extended credit totaling $26 million (originally provided by the Defense Fund of Iraq and now monitored by the Iraq Reconstruction Management Office) to rural Iraqis.