Workshop: Access to MSME Finance in Iraq

Access to MSME Finance in Iraq

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About the workshop

• Agenda

• Overview

Financial Inclusion Strategies Session

• National Strategies For Financial Inclusion - Lessons Learned

• Strategic financing for small and medium enterprises - IRAQ
• The Jordanian National Policy Framework for Microfinance Sector: Towards Inclusive Finance

Wholesale (Apex) Funding to Support MSME Growth Session

• MISFA Overview and Discussion

• Global Study on Microfinance Apexes Findings and Lessons Learned

Enabling Environment for Microfinance Session

• Establishing Conducive Regulatory Frameworks
• Access to Credit Services Initiative
• Regulatory and Institutional Challenges for Transformation - A Discussion on Way Forward

Financial Inclusion and the Use of Technology Session

• From Payments to Electronic Banking to Financial Inclusion
• WING Mobile Money and Technology
• The Logic behind Branchless Banking Regulation Frameworks

Effective Credit Reporting Frameworks Session

• ACRI Project: Presentation and Countries Experiences
• Building Effective Credit Reporting Systems

Secured Transactions in Iraq- a Demonstration of the Collateral Registry Session

• Improving the Business Environment in Iraq through Secured Transactions

Leasing for Financing the Purchase of Equipment Session

• Leasing: An Alternative Instrument for Financing the Purchase of Equipment

Beirut, October 16-17, 2011 - Access to finance for Micro, Small, and Medium Enterprises (MSMEs) is a critical component of a business ecosystem that can allow firms to grow and create jobs. MSMEs are significant contributors to GDP and employment in much of the developed and developing world, and the situation is no different in Iraq.

Although there is limited information on the characteristics of the Iraqi MSME sector and its demand for financing, recent studies indicate access to financing is a key constraint for MSMEs in the country, along with other hurdles such as macroeconomic instability, safety and energy shortages. The Iraqi financial sector, which remains heavily dominated by state owned banks, provides only limited credit for MSMEs. They in turn mainly rely on internal resources to finance their growth.

In recognition of this important topic, the World Bank MENA Finance and Private Sector Development team and the IFC organized a high-level workshop on MSME Access to Finance in Iraq. The workshop brought together global and regional experts to share lessons learned on a number of critical issues for the development of the Iraqi MSME sector.

The first half of the workshop, led by the World Bank team, focused on three main areas:

1. National Inclusions Strategies and how they are used by governments and donors around the world to streamline and galvanize support to the sector. The session highlighted global trends, key lessons from past experiences, and recommendations as to how the process of developing a national strategy can be applied to the Iraqi context.
   
2. Wholesale funding for MSMEs and the results of a global study on the evolving role of apex institutions and their ability to serve the financial and technical assistance needs of the MSME sector. The experiences of the Social Development Fund in Egypt and the Microfinance Investment Support Facility for Afghanistan were highlighted in particular.
   
3. The enabling environment for microfinance and its key strengths, as well as the areas which still require the attention of the Iraqi government.

The second half of the workshop was led by the IFC and focused on ways to strengthen Iraq’s financial infrastructure. Among the issues highlighted in a series of panels were branchless banking as a tool to enhance financial inclusion, global best practices in developing credit reporting frameworks, secured transactions, and leasing for financing the purchase of equipment. All of the issues were highlighted in a diagnostic of the Iraq MSME sector as among the weaknesses in Iraq’s financial infrastructure.

More than 50 people attended the workshop. Participants included Iraqi officials, representatives from the private sector, banks and microcredit institutions, and World Bank and IFC staff and international experts and practitioners on access to finance.