Iraq’s new SME financing initiative is giving fresh hope to small and medium enterprises across the country. This major financial program aims to close the long-standing funding gap that has limited business growth. The initiative was launched through a collaboration between the International Labour Organization and the Ministry of Labour and Social Affairs, with financial backing from Germany’s development partners.
The country’s credit support facility totals €40 million and is expected to unlock up to €100 million in new loans for entrepreneurs. The program focuses on empowering women- and youth-led businesses that often struggle to access finance. Guaranteeing part of the loan risk, it gives banks the confidence to extend more lending to smaller firms. Consequently, more entrepreneurs can invest, create jobs, and expand operations.
In addition, this financing mechanism encourages banks to diversify their portfolios. It helps support innovative startups, family-owned businesses, and ventures in non-oil sectors such as agriculture, trade, and manufacturing. This shift strengthens Iraq’s private sector and reduces reliance on oil revenues. Greater financial inclusion helps the country move toward a more balanced and sustainable economy.
The program has ambitious targets. It aims to provide 3,000 loans to SMEs, create roughly 4,000 new jobs, and preserve 5,000 existing positions. It also plans to deliver entrepreneurship and financial training to 3,000 business owners. These workshops cover essential skills such as budgeting, marketing, and financial management, enabling SMEs to operate more efficiently and profitably.
Iraq’s bank guarantee scheme manages the initiative and ensures fair access to funding nationwide. It works closely with banks to improve loan processing, transparency, and accountability. The organization’s role is critical to ensuring that the program benefits a wide range of entrepreneurs, including those in remote or underserved areas.
Furthermore, this credit program plays a key role in job creation and social stability. By helping businesses grow, it strengthens communities and provides opportunities for young Iraqis entering the workforce. The initiative also aligns with Iraq’s long-term vision for economic diversification, enabling citizens to build independent and sustainable livelihoods.
Overall, the national SME credit fund represents a significant step toward economic renewal. It provides small businesses with financing, tools, and confidence to succeed. With ongoing support from international partners and local institutions, Iraq’s private sector can lead the country toward sustained growth and stability.
