Five One Labs, a start-up incubator for entrepreneurs based in the Kurdistan Region of Iraq (KRI), has announced the grant recipients of its Growth Funding Project (GFP).

The program aims to support early- and later-stage startups that were impacted by COVID-19 with seed funding grants to grow their businesses, as well as business advisory from Five One Labs’ Startup Support team through the fall.

FIve One Labs received over 1,300 applications for the inaugural round of the Growth Funding Project. From this competitive set, 11 startups were selected to receive a total of $150,000 in grant funding provided by the German Agency for International Cooperation (GIZ). Of the 11 companies, five are led by women entrepreneurs.

“The startup landscape in Iraq is ripe with opportunity, as evident through the over one thousand applicants for the Growth Fund,” said Shwan Qaradaghi, Head of Expansion at Five One Labs. “We are excited to support these 11 startups who have remained resilient in the face of the challenges presented by COVID-19, and through their success we hope to continue to grow the evolving ecosystem of startups across the region.”

Winners were selected by a panel of Five One Labs entrepreneurship experts based on the following criteria: value proposition, traction, growth plans, financial management, team.

“Narrowing down this incredibly strong group of applications to the 11 winners was an incredibly challenging process,” explained Qaradaghi, who was on the judging panel. “We were impressed not only by the range of startups from new ideas to quickly growing, established businesses, but also by the variety of sectors and businesses included in the applications – from technology startups to furniture companies.”

Startups like Erbil-based green building consulting company KESK will leverage this capital to propel their growth and overcome barriers imposed by the COVID-19 pandemic.

Basima Abdulrahman, KESK’s founder said: “COVID-19 was a mass extinction event for startups that are already facing fundamental challenges in Iraq…The unexpected arrival of the pandemic has resulted in a major slump in consumer demand. Lack of funding is one of the key reasons why startups fail. Five One Labs’ GFP funding will help us achieve key milestones to acquire customers and drive sales and revenues.”

A full list of the grant recipients includes:

  • KESK (Erbil)
  • IoT KIDS (Baghdad)
  • Lala Candles (Erbil)
  • 3D PRINT IRAQ (Basra)
  • Techgigz (Baghdad)
  • ShopAsar (Sulaimani)
  • Bareo Adventure (Sulaimani)
  • Bedayat Platform (Erbil)
  • Ihgiz Tabbebak (Mosul)
  • Seven Professions (Baghdad)
  • Nakhsh (Sulaimani)

(Source: Five One Labs)

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By John Lee.

The Central Bank of Iraq (CBI) has announced increased funding for the housing sector, and the cancellation of interest on “old and current” loans.

It said it has allocated 1 trillion dinars [$685 million] to the Real Estate Bank and about 900 billion dinars [$616 million] to the Housing Fund.

(Source: CBI)

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By John Lee.

The Central Bank of Iraq (CBI) has confirmed its commitment to a stable foreign exchange rate for the Iraqi dinar.

According to a statement from the bank, “the dollar exchange rate is fixed and there are no intentions to change.

It added that the rate chosen at the end of 2020 was “based on in-depth studies of the requirements of the economic and financial situation and the objectives of monetary policy.

The CBI also cautioned that “statements related to the exchange rate are promoted for speculators to benefit from.

(Source: CBI)

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SFD signs a $10 million export financing agreement with the National Bank of Iraq

The Saudi Fund for Development (SFD) has signed an export financing agreement with the National Bank of Iraq (NBI), a subsidiary of the Capital Bank Group, to provide credit facilities worth $10 million to Iraqi importers who seek to import Saudi products and services. The step will help strengthen trade relations between the two nations.

The agreement was signed in Amman, Jordan, in the presence of Saudi Fund for Development CEO Sultan Abdulrahman Al-Marshad, and Basem Khalil Al-Salem, Chairman of the Board of Directors, Capital Bank, along with senior officials from both sides.

Under the agreement, SFD will provide a $10 million revolving line facility to the National Bank of Iraq to finance 100% of Saudi exports to Iraq with a repayment period of up to 36 months, depending on the type of imports and the nature of the trade transactions.

SFD CEO Sultan Abdulrahman Al-Marshad said:

This agreement reflects the strong ties between the Kingdom and Iraq, and our mutual desire to increase cooperation across several sectors. It is part of an ongoing $1.5 billion that the Saudi government allocated to support reconstruction and development projects in Iraq.

“Supporting stability in countries seeking to achieve sustainable economic and social development is one of the main priorities of the SFD, and through this agreement, we seek to achieve prosperity for both nations.

“The agreement with the National Bank of Iraq is consistent with the Kingdom’s aim to diversify its national economy and increase its non-oil exports, will open new markets for Saudi producers, and it will stimulate the Iraqi commercial and financial sector.”

Chairman of the Board of Directors of Capital Bank Basem Khalil Al-Salem welcomed the new trade relations. Said Al-Salem:

The role of SFD in supporting and financing development projects in Iraq reflects the historical relationship between our two nations and Saudi Arabia’s ongoing commitment to Arab economic integration throughout the region.

“This line of financing will expand trade between Iraq and Saudi Arabia by providing credit facilities for Iraqi investors to import Saudi products and services at competitive prices. It will also increase transport links between our two nations and stimulate the financial and commercial sectors.

The agreement is the first in an ongoing program of economic regeneration between SFD and the National Bank of Iraq.

(Source: SFD)

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Abu Dhabi Islamic Bank (ADIB) has said it will strengthen its presence in Iraqi market by launching “ADIB Direct“, a digital platform that meets the growing business demands in Iraq.

ADIB Direct is an intuitive digital banking platform that integrates a suite of corporate banking solutions into a single, streamlined interface. The platform offers cash management solutions, cashflow forecasting, and foreign exchange services.

Abdullah Al Shehhi, Head of International Banking Group at ADIB said:

“At ADIB, we believe we play an important role in supporting Iraq’s local economy by providing businesses the banking services they need to help them thrive and achieve their financial goals. Through ADIB Direct, we enable companies to efficiently manage their cash payments, liquidity, trade finance, supply chain and foreign exchange needs so they have more time to focus on their business.”

Since its launch in 2019 in UAE, ADIB Direct has helped automate a variety of services for companies, providing them with significant cost and time saving efficiencies. Currently, over 90% of ADIB UAE’s online corporate banking services are fulfilled digitally through the platform.

ADIB is the first UAE bank to have a presence in Iraq in 2012. The bank offers a full range of Shari’a compliant corporate banking products and services. With branches across Baghdad, Erbil, and Basra, ADIB’s broad banking expertise covers government and public sector entities, and a diversified private sector base of financial institutions, trading, contracting, oil & gas, power & energy, manufacturing, and other industries.

(Source: ADIB)

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By Dr. Zeki Fattah, for The Iraqi Economists Network (IEN). Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

The Dutch Disease and Iraq’s Foreign Exchange Rate

Economists who studied the reasons for the low per capita growth of GDP in developing countries that rely on revenues from abundant natural resources, (called ‘resource curse’), found it was actually caused not by high exchange rates, but by wrongly conceived economic policies over a long period of time.

We will visit this point again at the end of the paper. Meanwhile, and until recently, monetary economists in Iraq explained the fall in the Dinar exchange rate against the Dollar (a change within the expected norm) as a passing event caused by falling oil prices, and trepidation in the markets in the wake of COVID-19.

This explanation whilst went some way toward dampening the need for currency devaluation for a while, it didn’t help the Iraqi Government to raise the cash it needed to meet its obligations. Recently, the Government had to reduce the Dinar exchange rate against the Dollar considerably to increase the Dinars it receives from the Central Bank in exchange for the Dollar it receives mainly from oil exports.

Please click here to read the full report.

(Source: IEN)

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30 Years Jail for Bank Fraud in Amara

By John Lee.

Iraq’s Commission of Integrity (COI) has announced that an accountant at the Al-Amara branch of the Agricultural Cooperative Bank has been given a 30-year prison sentence for the embezzlement of 996 million Iraqi dinars ($680,000).

Her assets were also seized, and she will be required to repay the amount.

A former director of the branch had recently been sentenced to 21 years in prison in relation to the same offense.

(Source: Commission of Integrity)

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By John Lee.

Iraq is reportedly trying to recover Iraqi funds frozen in Italy.

Foreign Minister Fuad Hussein (pictured) is reported as saying that Baghdad is attempting to recover around EUR 600 million, plus interest, that the Saddam Hussein regime paid to Italian companies to purchase weapons.

According to Basnews, the weapons were not delivered because of the 1991 embargo on the sale of arms to the country.

(Source: Basnews)

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From the Iraqi Voices podcast. Any opinions expressed here are those of the author(s) and do not necessarily reflect the views of Iraq Business News.

How Can Iraq Upgrade Its Banking Sector?

Iraqi Voices hosts Akel Al-Ansari, a commercial banking specialist, to discuss the current state of the banking sector in Iraq and what is needed to fulfill its true potential.

Click here to listen to the podcast.

The post Audio: How Can Iraq Upgrade Its Banking Sector? first appeared on Iraq Business News.
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By John Lee.

The United Kingdom has removed Iraq from the list of high-risk third countries for the purposes of money laundering legislation.

The new listing — “Schedule 3ZA” — does not include Iraq.  This schedule replaces the list in Commission Delegated Regulation (EU) 2016/1675 of 14th July 2016 by identifying high-risk third countries with strategic deficiencies (“the CDR”).

The Central Bank of Iraq (CBI) welcomed the decision, saying:

The fact that Iraq is not included in the list of high-risk countries is positively reflected in facilitating business and entering companies between the two countries, as well as supporting financial operations between the Iraqi banking sector and the United Kingdom.

More here, here, here (Arabic) and here.

(Sources: UK Govt, Central Bank of Iraq)

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