The Legal and Regulatory Framework for Microfinance in Iraq

Over the past few years, Microfinance Institutions (MFIs) in Iraq have emerged as credible sources of financing for low-income households and entrepreneurs, both underserved by conventional banks. Microfinance services in Iraq, however, are still n...

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Bibliographic Details
Main Author:	World Bank Group
Format:	Report
Language:	English en_US
Published:	Washington, DC 2015
Subjects:	ACCESS TO CREDIT ACCESS TO FINANCE ACCESS TO FINANCIAL SERVICES ACCESS TO FINANCING ACCOUNTS RECEIVABLE AFFILIATES ANTI-MONEY LAUNDERING AUDITING BALANCE SHEET BALANCE SHEETS BANK ASSETS BANK CREDIT BANK GUARANTEES BANK LOAN BANK LOANS BANKING LAW BANKING SECTOR BANKING SYSTEM BORROWING BORROWINGS BUSINESS LOANS CAPACITY BUILDING CAPITAL ADEQUACY CAPITAL REQUIREMENT CAPITAL REQUIREMENTS CAPITAL STRUCTURE CASH FLOW CENTRAL BANKS COLLATERAL COLLATERAL REQUIREMENTS COMMERCIAL BANK COMMERCIAL BANKS COMMERCIAL LENDING CONSOLIDATED FINANCIAL STATEMENTS CONSUMER PROTECTION CONTRACT ENFORCEMENT CONVENTIONAL BANK CONVENTIONAL BANKS CONVENTIONAL FINANCIAL INSTITUTIONS COUNTRY COMPARISONS CREDIT BUREAU CREDIT BUREAUS CREDIT INFORMATION CREDIT INFORMATION SYSTEM CREDIT LINES CREDIT PROVIDERS CREDIT REGISTRY CREDIT REPORT CREDIT REPORTING CREDIT RISK CREDIT SCORES CREDITS CREDITWORTHINESS CURRENT ACCOUNT CURRENT ACCOUNTS CUSTOMER RELATIONSHIP DEBT DEBT BURDEN DEPOSIT DEPOSITS DEVELOPMENT CENTER DOCUMENTATION REQUIREMENTS DONOR FUNDING DONOR RESOURCES DONOR SUPPORT ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIES OF SCALE EMPLOYEE EMPLOYER EMPLOYERS ENTREPRENEURS EQUITY REQUIREMENTS EUROPEAN CENTRAL BANK EXCHANGE RATE EXTERNAL AUDITORS FAIR LENDING FINANCE COMPANIES FINANCE COMPANY FINANCIAL COSTS FINANCIAL INSTITUTIONS FINANCIAL LEASING FINANCIAL PERFORMANCE FINANCIAL REGULATOR FINANCIAL RESOURCES FINANCIAL SECTOR DEVELOPMENT FINANCIAL SERVICE FINANCIAL SERVICE PROVIDERS FINANCIAL SERVICES PROVIDERS FINANCIAL SYSTEM FINANCIAL TRANSACTIONS FOREIGN ASSETS FOREIGN BANKS FOREIGN CURRENCIES FOREIGN CURRENCY FOREIGN EXCHANGE FOREIGN INVESTMENT FOREIGN INVESTMENTS FORMAL FINANCIAL INSTITUTION FORMAL FINANCIAL SECTOR FORMAL FINANCIAL SERVICES FREE LOANS FUNDING SOURCES GOVERNMENT FUNDING GOVERNMENT INTERVENTION GUARANTORS HOUSEHOLD WELFARE HOUSEHOLDS HOUSING LOANS INCOME GROUP INCOME STATEMENTS INCOME TAX INCOME-GENERATING PROJECT INCOME-GENERATING PROJECTS INDEBTEDNESS INEQUALITIES INEQUALITY INFORMATION GAP INFORMATION SHARING INSIDER LENDING INSURANCE INSURANCE POLICY INSURANCE SERVICES INTEREST RATE INTEREST RATES INVENTORY LAWS LEGAL FRAMEWORK LEGAL PROVISION LEGAL REQUIREMENT LEGISLATION LENDERS LEVEL PLAYING FIELD LIQUID ASSETS LOAN LOAN AMOUNT LOAN AMOUNTS LOAN CLASSIFICATION LOAN CONTRACT LOAN CONTRACTS LOAN DELINQUENCY LOAN DOCUMENTATION LOAN PORTFOLIO LOAN PORTFOLIOS LOAN PROCESSING LOAN PROCESSING TIME LOAN PROGRAM LOAN PROVISIONING LOAN RECOVERY LOAN SIZE LOAN TERMS LOW-INCOME CONSUMERS MARKET VALUE MAXIMUM LOAN AMOUNT MFI MFIS MICRO-ENTERPRISES MICRO-LENDING MICROCREDIT MICROFINANCE MICROFINANCE INSTITUTION MICROFINANCE INSTITUTIONS MONETARY POLICY MONEY LAUNDERING MONEY TRANSFER MONEY TRANSFERS MOVABLE COLLATERAL NEW ENTRANTS OPERATING COSTS OPERATIONAL COSTS OUTREACH OVERDRAFT PAYMENT OBLIGATIONS PAYMENT SERVICE POSTAL SAVING PRIVATE BANKS PRIVATE CREDIT PRIVATE INVESTMENT PRIVATE LENDER PRODUCTIVITY PROFITABILITY PROPENSITY TO SAVE PROVIDERS OF CREDIT PRUDENTIAL REGULATIONS PRUDENTIAL REQUIREMENTS PUBLIC CREDIT PUBLIC FUNDS REAL ESTATE REGULATORY FRAMEWORK REPAYMENT REPAYMENT PERIOD REPAYMENT RATES RESERVE REQUIREMENT RESOURCE ALLOCATION RISK MANAGEMENT RISK OF LOSS SAVINGS SAVINGS BEHAVIOR SECURITIES SMALL BUSINESSES SMALL ENTERPRISES SOCIAL RESPONSIBILITY SOURCE OF CREDIT SOURCES OF CREDIT SOURCES OF FUNDS STOCK MARKET SUBSIDIARIES TAX EXEMPTIONS TERMS OF LOAN TRADE CREDITS TRADE VOLUME TRANSPARENT MARKET UNEMPLOYMENT UNFAIR COMPETITION URBAN AREAS USURY WHOLESALE FUNDING WOMAN WORKING CAPITAL
Online Access:	http://documents.worldbank.org/curated/en/2014/10/24082302/legal-regulatory-framework-microfinance-iraq http://hdl.handle.net/10986/21713

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Summary:	Over the past few years, Microfinance Institutions (MFIs) in Iraq have emerged as credible sources of financing for low-income households and entrepreneurs, both underserved by conventional banks. Microfinance services in Iraq, however, are still nascent and far from meeting their full potential. Similar to many countries in the MENA region, MFIs in Iraq were set up as non-governmental organizations (NGOs) supported by a steady influx of donor funding. While these NGOs were initially able to grow through donor support, they are now struggling to meet increasing client demand as donor resources have dwindled, preventing them from making the necessary investments in capital and infrastructure to meet growing client demand. Many countries address this funding challenge by allowing institutions to provide financial services as companies or banks, helping them raise capital, provide new services, and increase their outreach in a sustainable manner. A similar path could be envisioned in Iraq, but is currently obstructed by regulatory hurdles. This diagnostic report aims to present and assess the current microfinance landscape in Iraq, including the legal and regulatory framework, recommend policy improvements to enhance the sustainability and operating environment for MFIs and their clients. This report argues that the current legal and regulatory environment for microfinance in Iraq hinders the growth and sustainability of the sector and furthermore advocates several short and medium term policy recommendations to enhance the overall operating environment for MFIs, the sustainability of the sector, and impact for clients.

The Legal and Regulatory Framework for Microfinance in Iraq

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