In the wake of years of war, very few Iraqis have access to startup capital or collateral required to obtain a loan. While it’s difficult to find a reliable statistic for Iraq’s unemployment rate, its clear that the economy is in need of deep investment and reconstruction; the CIA World Factbook notes an official unemployment rate of 15.8%, with unofficial figures as high as 30%. Other sources have estimated a rate as high as 60%. (Gen. Barry McAffrey estimated it to be 60% at the end of 2008 in a public memo ). Despite these hardships, Iraq remains a place of fascinating history and rich cultural and artistic traditions.
Founded in July 2003 by CHF International, Access to Credit Services Initiative Iraq (ACSI) was the first MFI in Iraq to put money in the streets. Seven years later ACSI is Iraq’s largest microfinance institution. Having made its first disbursements just months after the US-led invasion, ACSI’s work has been instrumental in developing the microenterprise sector during a period of civil war, political instability, and foreign occupation.
Since inception, ACSI has invested over $225 million in loan capital, and maintained a delinquency rate of less than 1%. They now cover 51% of the microfinance market in Iraq, and have established a branch network covering 65% of Iraq’s geographic area. They operate 13 branch offices in Northern, Central and Southern Iraq, staffed largely by locally recruited and trained employees.
ACSI’s lending methodology is tailored to the Iraqi cultural context, where the vast majority of borrowers are Muslim. Because the prohibition of interest is a key tenet of Islam, ACSI uses fees rather than interest to cover the cost of administering its loans. These fees are subtracted in their entirety from the gross amount of the loan at the time of disbursal. To learn more about this lending methodology, click here .
ACSI’s success over the past 7 years speaks not only to the quality of their operations, but also to the strength and resilience of the people of Iraq. You can contribute to ACSI’s first Kiva loans , or read more about ACSI on their partner page . Please join us in congratulating ACSI and welcoming them to Kiva!