FinTech revolutionizes small business landscape of Iraq


Surging Digital Economy Ecosystem Boosts Middle Class

The digital age has unified the Iraqi people, having reached into nearly every town and village throughout the country and contributed to building Iraq’s digital economy.

Susan Hufton explains that according to Internet World Stats (IWS), almost 50 percent of the Iraqi population accesses the internet, and reports nearly 95 percent mobile phone penetration. Between these two channels, Iraqi citizens are now accessing valuable information and services. The availability and access to networking technologies like the internet and mobile phones, has laid the foundation for a digital economy and opened the doors toward financial inclusion.

Iraq’s homegrown fintech Qi Card, plugged into the surging mobile and internet networks to help drive financial inclusion for the country’s 38 million citizens, and one of the Middle East’s most underbanked countries. This started with the introduction of integrative technologies such as biometric identification and an electronic payment system ecosystem.

ISC’s partnership with state banks Al-Rafidain and Al-Rashed is the most successful public/private partnership in the history of Iraq, and its value toward making banking services readily available to the unbanked/underbanked population is readily demonstrated.

Qi Card circulated throughout the population as a way to link citizens to the state-based financial system. Safety, convenience, and efficiency were critical benefits for working, retired, and displaced Iraqis. Digital payments assure that state-funded payments are expedited for quick disbursement of funds to citizens across the country.

The system reduced the frequency of transporting large amounts of cash currency through dangerous roads. Beneficiaries no longer need to wait in line outside the bank for hours on designated days waiting to receive money.

The biometric identification ensured that money reached the intended person. New security parameters dramatically reduced the system of fraudulent beneficiaries and organized crime syndicates defrauding the country’s financial system, two areas that the Iraqi government had long struggled to contain.

A large part of the Qi Card ecosystem was intended to fuel the surgency of an Iraqi middle class. This meant implementing a small loan system creating opportunities for aspiring entrepreneurs. Iraqi banks did not traditionally serve small loans.

A person who needed to pay a hospital bill or wanted to open a small restaurant, bakery, or tailoring store could not access funds based on their creditworthiness. This simply was not a traditional practice of the past.

This changed with the ISC-driven digital economy landscape. The loan program allowed citizens to have instant access to credit, entrepreneurs to innovate and build new business amenities to serve their communities while offering financially responsible solutions.

This reduces the risky practice of borrowing money from a loan shark and can safely strengthen a working, middle-class system through entrepreneurship. Replacing out of date processes with a new digital economy strengthens the financial ecosystem of Iraq and creates a system of accountability, progress, and security.

If Iraq’s new digital economy, built on technological advancements, continues to foster a system of financial inclusion, then perhaps, finally, the term “underserved” will no longer define Iraqi consumers and businesses.