Financial Crime World

Iraq Faces Compliance Issues in Financial Services, Experts Warn

Despite efforts to boost economic growth and improve social well-being, Iraq’s financial sector continues to grapple with widespread distrust among citizens. According to recent data, less than 20 percent of adults in the country hold a bank account with a formal financial institution.

Limited Access to Financial Services

This lack of trust has led many individuals and businesses to rely on cash transactions over credit cards or digital payment methods, restricting access to essential financial services such as loans and savings accounts. In fact:

  • Fewer than five percent of micro, small, and medium-sized enterprises in Iraq use bank lending
  • Less than 20 percent of adults hold a bank account with a formal financial institution

Enhancing Financial Inclusion

Experts say that enhancing financial inclusion for vulnerable populations and businesses is crucial to addressing these issues and unlocking economic potential. “Financial inclusion is key to boosting economic growth and improving social well-being in Iraq,” said a leading expert on the issue.

To address this challenge, the German Development Cooperation (GIZ) has launched a project aimed at promoting inclusive financial services. The initiative focuses on:

  • Advising and empowering financial service providers to develop innovative and targeted products for vulnerable populations and small businesses
  • Training programs on financial literacy
  • Awareness-raising campaigns to educate citizens about available financial services
  • Supporting the Central Bank of Iraq (CBI) in its efforts to regulate and promote inclusive financial services

Empowering Women-Led Businesses

Improving access to financial services for women-led businesses is a key component of the project. “Women-led enterprises are critical to economic growth and development in Iraq,” said an official from GIZ. “By providing them with better access to financial services, we can help unlock their potential and drive economic progress.”

Project Goals

The project aims to:

  • Improve framework conditions
  • Increase financial inclusion among vulnerable populations and small businesses
  • Promote sustainable economic growth

With its comprehensive approach, the initiative hopes to make a significant impact on Iraq’s financial sector and promote sustainable economic growth.