SME Financing

Since 2003, Iraq has undergone a political, social and economic transformation, marked by numerous setbacks that have repeatedly exposed the country’s institutional weaknesses, such as low trust in state and financial actors, overdependence on oil exports, and a significant budget deficit.

The dominance of state actors continues to suppress private sector dynamics, hindering the country’s economic recovery. In response, the government has developed a national strategy comprising 64 reform projects aimed at addressing economic and fiscal challenges.

This BMZ/EU-funded project supports key elements of a dozen of these reform initiatives. It specifically aims to strengthen financial and fiscal governance systems to promote macro-fiscal stability and economic development. This includes improvements to public financial management and accountability, the mobilisation of non-oil public revenues, the AML/CFT system, and financial sector stability.

Output 4, covered under this contract, focuses on strengthening the capacity of relevant actors to finance private sector activities. The Central Bank of Iraq is the key implementing partner for this output.

The ultimate target group is SMEs, reached through intermediaries such as banks, microfinance institutions, FinTechs, leasing companies and SME lending institutions.