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Une cliente de Vitas en Irak
The USD 3.95 million portfolio guarantee granted by Proparco marks its first operation with the microfinance sector in Iraq. It testifies to its commitment to supporting the private sector in fragile countries and further reinforces its partnership with Vitas Group, a leading microfinance actor in the MENA region.

Although Micro, Small and Medium-Sized Enterprises (MSMEs) provide two thirds of Iraq’s private sector employment, they remain underserved by financial institutions. Only 5% of MSMEs report having received a loan from a conventional bank, resulting in a finance gap that now amounts to USD 70 billion.

In order to work toward bridging this gap, Proparco has just signed its first operation with a microfinance institution (MFI) in Iraq, a USD 3.95m portfolio guarantee with Vitas Iraq.

With over 375,000 historic clients, 410,000 disbursed loans & 20,000 jobs created, Vitas Iraq is the leading MFI in Iraq that responds to both Iraqi men and women needs and foster the long-term development of individuals, their businesses, their families, and the communities in which they live.  It has demonstrated its ability to cater to the needs of a growing base of clients all across Iraq, despite operating in a challenging context. In addition, Vitas Iraq is part of Vitas Group, a well-known client of Proparco in Lebanon and Palestine. Vitas Group has the largest network of MFIs in the Middle East and is a reputable player in the sector.

To reduce the risks taken by Vitas while financing MSMEs in Iraq, PROPARCO has set up a portfolio guarantee called ARIZ TPE and funded through Proparco’s Fragile Countries Envelope. This risk-sharing mechanism targets mainly MSMEs operating in areas facing crises. It covers a significant number of small loans, and thus facilitates access to financing for companies with high-risk profiles in extremely vulnerable situations.

We are proud to be launching this new initiative to support MSMEs entrepreneurs with PROPARCO. Vitas Iraq is committed to bridging the gap to the financial inclusion of MSMEs, which are indispensable players in the Iraqi economy. This is crucial in order to empower working class Iraqis and improve their quality of life”, said Moustafa Khalifeh, General Manager of Vitas Iraq.

We are very honored to be working with Vitas, the leading microfinance institution in Iraq, through our ARIZ SME tool dedicated to entrepreneurship in vulnerable regions. This new project proves once more PROPARCO’s renewed commitment to support the private sector and bolster financial inclusion in the MENA region”, said Xavier Echasseriau, Deputy Director of PROPARCO’s Financial Institutions and Inclusion Division in charge of Guarantees for Development.