Paper
Post-Conflict Microfinance: Assessment and Policy Notes for Iraq
Will microfinance operations work in Iraq?
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13 pages
This paper explores the potential of microfinance in post-conflict economies, and specifically examines policy considerations for the case of Iraq. The paper:
- Presents important conditions of the post-conflict economy. These include:
- Human resource limitations;
- Damaged economic mechanisms;
- Security considerations that limit operations and raise costs.
- Examines the critical requirements for successful microfinance operations that the Microenterprises Best Practices Project outlines. These include:
- Tailor-made services for the local client population;
- Lowering of costs;
- Dependence on timely repayments;
- Recovery of long-term costs.
- Evaluates political stability, economic demand and population stability in the case of Iraq.
- Addresses several other considerations, including matters of scale, government mechanisms and support, and gender and religious contexts.
The author concludes that:
- The lack of political stability in Iraq is prohibitive for microfinance institutions (MFIs) in urban centers;
- The civil police are often targets for insurgent activity and cannot offer protection to reconstruction efforts;
- However, there is reason to be optimistic about microfinance working in Iraq, because the oil economy has strong demand and supply;
- Microfinance in Iraq can stimulate the livelihoods of large number of people;
- It can offer a foundation, both in terms of substance and of access to the local population;
- Until civic peace begins, MFIs will face overwhelming barriers to success in Iraq.
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