How We Work

ICF-SME functions as an intermediary financial institution that channels funding (grants) to multiple Iraqi private commercial banks while offering supporting technical services. Key participants, reporting accountability and flow of funds are illustrated below:

The revolving nature of SME loans granted by the participating banks enables funds to be recycled as a source for new loans. The process is strictly controlled and monitored - repayments on loans are accumulated in a separate SME control account maintained by each bank, and continually utilized to finance a new generation of loans. ICF-SME charges a funds management fee which, depending on the grant program under administration, may vary from 4% p.a. down to 1.5% p.a. paid by lenders quarterly in arrears on funds allocated to them.

Grants under administration:

  • $6 million funded under the USAID-Tijara Provincial Economic Growth Program – financing SME’s in general.

The Tijara Provincial Economic Growth Program (Tijara means “trade” in Arabic) commenced in January 2008 through sponsorship by the United States Agency for International Development (USAID). The program promotes private sector expansion through a number of initiatives, including increasing access to finance services to Iraqi SME beneficiaries. It provided a $6 million starter grant to ICF-SME in June 2009.

  • $1 million funded through the USAID-Inma Program – financing agri-business exclusively.

The Inma Program, which means "growth" in Arabic, is a comprehensive program funded by USAID to support the development of agribusinesses and agricultural markets in Iraq. The program is implemented in partnership with the Government of Iraq, Provincial Reconstruction Teams, local government agencies and the Iraqi private sector. This grant was initially to support agribusiness loans in Anbar province, but is now being made available in eight other provinces.

  • $10 million US Government to USAID-Tijara - to finance SME’s owned by displaced entrepreneurs (IVGS).

The IVGS initiative was launched to finance income generating activities of displaced entrepreneurs who have lost their assets and / or means to generate income due to circumstances beyond their control. SME loans offered under the IVGS initiative generally range between ID six million ($5,000) and ID 20 million (17,000), at highly concessionary interest rates. Loans are used to rehabilitate or enhance existing businesses or to finance start-up ventures, from which income is generated thereby increasing the prospect for improved livelihoods. Qualified banks began lending in March 2012.