Provincial Economic Growth Program

The program aims to provide low-cost funding to banks for on-lending to Small and Medium-sized Enterprises (SMEs). ICBG functions as a Credit Insurance Company, offering partial guarantees of up to 75% of the principal on bank loans to SMEs. The program has been successful in disbursing 330 guaranteed loans since April 2008, with a total value of $7,101,930. The member banks participating in the program are Gulf Bank, Ashur Bank, Bank of Baghdad, Basrah Bank, National Bank, North Bank, Iraqi Middle East Bank, Sumer Bank, and Sumer Bank. The member banks have contributed $4.4 million in paid-in capital, and USAID has provided conditional grants of up to $5 million. The guaranteed loans are distributed across various sectors, including agriculture, construction, trade, and services. The largest share of the loans is allocated to the trade sector, accounting for 41.61% of the total amount. The construction sector receives 18.91% of the loans, followed by the services sector, which receives 9.91%. The program has also established a network of SME Lending Units, operating in 33 branches of 9 ICBG member banks across 12 governorates. The units are responsible for providing financial services to SMEs, including loan disbursements and credit counseling. In May 2009, the Iraqi Company for SME Financing was established as a Non-Bank Financial Institution (NBFI). The company's primary activity is to provide financing to banks to fund their SME loan portfolios. The company received a USAID grant of $6 million as "starter capital" and has distributed $3 million to its shareholders. The company's goals for 2010 include financing 300-350 loans, with a total value of $9.4 million, using a combination of USAID grants, shareholder loans, and bank loan participation.