Iraqi “First Digital-Only Payment Card”

Iraq-based International Network for Cards and Digital Payment Services (INC Iraq) and a Lebanese fintech startup NymCard that is digitizing how payments cards are issued, delivered, and used, in collaboration with Visa have launched the first digital-only (prepaid) payment card ‘Neo‘ in Iraq to serve the underbanked Iraqi population, the two companies announced in a joint-statement to MENAbytes.

The virtual card that can be requested through Neo’s mobile app within seconds will enable users to make online purchases on both local and international websites. The entire KYC process is digital. Neo’s mobile application (available for both iOS and Android) comes with a mobile wallet that allows users to keep an eye on their expenses.

The users can recharge their topup their Neo wallet through INC Iraq’s network of offline agents and then add the money from wallet to their card. A company representative, speaking to MENAbytes, said that INC plans to have 2,500 agents in its network within 12 months.

More here.

(Source: Menabytes)

Source: Iraq News

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This study seeks to better evidence and understand the scale, terms, sources, uses, and social dimensions of household debt within conflict-affected communities in northern Iraq, with a view to inform ongoing and future CCI relief and recovery programming.

The research was carried out in two conflict-affected districts in the Ninewa governorate – Mosul and Tel Afar, representing urban and rural communities respectively, among female- and male-headed households eligible for multi-purpose cash assistance (MPCA). The key findings from the research are below. The recommendations for future programming are in Section 8.

Key Findings

• Household debt in Iraq is widespread, necessary, highly informal, and relationship dependent. The scale of household debt in two districts in Ninewa – Mosul and Tel Afar – is significant, with 79% of survey respondents in debt and with average debts exceeding IQD 3 million ($2,840).

• However, with low per capita incomes (especially among rural and female-headed households), and unreliable sources of income generation, most households struggle to fully repay their debt. It would take the average household 157 months, or 13 years, to fully repay their debt at current repayment rates.

• Urban households are significantly more indebted than rural households, however rural female-headed households have more debt than urban female-headed households and rural male-headed households, due to considerably lower incomes.

• MPCA recipient households had more debt than those who had yet to receive MPCA (or were borderline ineligible), suggesting households use their MPCA to both repay debt and secure continued access to credit, in line with earlier CCI research.

• Loans are predominantly given as cash, however 31% are given as goods on credit – here termed ‘material’ loans.

• The debt market is almost entirely informal, with loans sourced from family members, friends, and familiar local businesses, and are used by households to cover critical basic needs such as food, water, medical costs, and rental payments.
Those with loans from family members had, on average, 29% more debt than those sourcing debt from friends and businesses.

• Debt is seen by borrowers as a supplementary tool, which alongside income and humanitarian assistance is accessed and used when gaps in cash flow must be filled.
Very few households in these communities have loans through formal institutions, largely due to the lack of collateral needed to obtain institutional loans.

• Within this close-knit and informal network, having good pre-existing relationships with creditors is necessary to access debt. Lenders offer debt in part through a sense of communal obligation, but nevertheless need an established level of trust with the borrower before extending credit. It is the relationship that acts as a proxy for the established features of formal lending such as contracts. In short: the relationship between lender and borrower is the contract.

• Large initial loans and below- average repayment rates negatively impact the borrower-lender relationships. In these cases, households are not only in a situation of low incomes and scarce opportunities for work, but potentially lose their access to the informal support networks necessary to cover gaps in cash flow and so, meet basic needs.

• Even for those who reported sustaining good relationships with lenders, their debts are such that, without regular incomes or for those unable to work, government welfare, they face years of being indebted and relying on informal support networks.

Full report here.

(Source: ReliefWeb)

Source: Iraq News

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EXIM signs MoU with Iraq

By John Lee.

The Export-Import Bank of the United States (EXIM) has entered into a memorandum of understanding (MOU) with the Ministry of Finance of the government of Iraq aimed at rebuilding Iraq and enhancing trade and economic cooperation between the two countries.

The MOU replaces the previous agreement signed in Kuwait in February 2018 and increases the total amount of EXIM financing potentially available under the MOU from $3 billion up to a total of $5 billion.

At EXIM headquarters in Washington this afternoon, EXIM President and Chairman Kimberly A. Reed signed the MOU with Iraqi Deputy Prime Minister and Minister of Finance Dr. Fuad Hussein. The signing also was witnessed by Iraq Ambassador to the United States Fareed Yasseen.

EXIM President and Chairman Kimberly A. Reed said,

This MOU signals to the marketplace that U.S. companies and their workers in America want to be a part of the rebuilding effort in Iraq.

“We anticipate that the EXIM-backed financing to follow from this agreement will support exporter and supply-chain jobs in multiple industries across the United States and also foster job creation in Iraq.

“Iraq is an important partner to the United States, and we look forward to working together to strengthen the relationship between our two countries.

Under the MOU, EXIM and Iraq’s Ministry of Finance agreed to identify potential projects in Iraq for procurement of U.S.-produced goods and services. EXIM agreed to explore options for providing the agency’s medium- and long-term loans, guarantees, and export credit insurance to support U.S. exports to Iraq.

For projects that may be eligible for EXIM support, cooperation between the Ministry of Finance and EXIM would be directed towards qualifying such projects for approval by both institutions.

(Source: EXIM)

Source: Iraq News

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Iraq’s Credit Profile “Constrained”

By John Lee.

Iraq’s (Caa1 stable) credit challenges include very weak institutions and governance that limit policy effectiveness, constrain the government’s capacity to respond to external and domestic shocks and weigh on economic competitiveness, Moody’s Investors Service said in a report this week.

It says last year’s improvement in the fiscal and external balances was almost entirely due to higher oil prices without any structural improvement that would reduce the impact of future possible falls in oil prices. Iraq also faces very high levels of political event risk.

More here.

(Source: Moody’s Investors Service)

(Picture: Bonds, from Alexskopje/Shutterstock)

Source: Iraq News

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