The U.S. Agency for International Development (USAID) has awarded three grants – totaling $8.9 million – to establish a sustainable microfinance industry in Iraq.
USAID's private sector development program, Izdihar, recently awarded the grants, each for approximately $3 million, to three international non-governmental organizations (NGOs) to help build the capacity of Iraqi microfinance institutions throughout all of Iraq's 18 provinces. Two of the recipients already have existing operations in Iraq.
The NGOs will provide no-interest 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.
Through these 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.