Program Goal / Need:
Millennium was a subcontractor ($5.4 million) to Louis Berger under this $150 + million USAID economic growth program to provide assistance to develop and strengthen private sector capacity by developing the SME sector in Iraq. Developing credit services for the SME sector is crucial to economic growth since small firms are only able to grow and expand when they are able to obtain capital. This growth is crucial to improving employment opportunities for Iraqis and for greater long-term stability in a post conflict environment. Efforts to ensure that credit access is available to all, including women, supports a more open and inclusive dynamic to Iraq’s economic development.

Program Description:
The focus was on streamlining access to capital provided by private banks. In this activity of Tijara, Millennium helped facilitate operations of the Iraq Company for Bank Guarantees (ICBG) which provides guarantees to Iraqi banks to encourage local banks to making loans to Iraqi Micro/Small and Medium Enterprises (MSME) sector by lowering the credit risks borne by lenders. As part of this effort, MIC assisted the private banking sector to improve their services, deliver additional financial products, and adopt international best practices in SME lending and reporting. It also provided training and technical assistance to the banks for the development of dedicated SME lending units within their organizations to ensure the delivery of appropriate financial services to the SME sector.

Program Results:
The following are some of the many accomplishments of Millennium’s work on Tijara:

• Establishment of a SME Working Group that allowed relevant stakeholders to meet and discuss issues and develop policy recommendations and a coherent SME development strategy
• Reduction of collateral requirements, especially important for the manufacturing sector
• Reduction of interests rates on loans
• Reduction of application requirements for SMEs seeking to access financing
• Hosting quarterly networking forums for bankers
• Developing banking skills for employees
• Development of the ICBG Management, Operations, board, charter, annual shareholder meetings
• Increasing ICBG loan guarantees from $0 to over $50 million from 2008-2013.
• Annual SME summits to highlight progress in this sector and engage with major stakeholders including foreign banks, the Ministry of
• Finance, Ministry of Planning, CBI and others.
• Produced detailed assessment of SME access to finance in: Access to Finance By Micro, Medium and Small Enterprises in Iraq