AFP, Diwaniyah :
The bustling streets of Iraq’s biggest cities are lined with private and public banks that promise investment and credit. But businesses barely use them and individuals don’t trust them.
“Iraqi banks today are still so far away from global standards,” said Abbas Anid Ghanem, an Iraqi economist and lawyer based in the southern city of Diwaniyah.
The problems date back decades, Ghanem told AFP.
In the 1990s, Iraq was isolated from the outside world by crippling sanctions on then-dictator Saddam Hussein that blocked financial transactions with the country.
Following the US-led invasion in 2003, widespread looting saw bank vaults emptied of any cash, even as businesses from around the world were flying into Iraq to sniff out reconstruction deals.
More than 70 banks have popped up since, but the sector as a whole remains underdeveloped.
The three largest – Al-Rafidain, Al-Rasheed and the Trade Bank of Iraq (TBI) – are state-owned and hold around 90 percent of the entire sector’s assets, the World Bank said in 2018.
The first two suffer from “capital deficiencies and asset quality problems”, the World Bank said, meaning they are short on deposits and have risky credits.
TBI was established in a 2003 decree issued by the Coalition Provisional Authority, which managed Iraq post-invasion.
“TBI was meant to help Iraq develop and rebuild, but it was affected by sectarian power-sharing and financial corruption,” said Ghanem.
Now, the bank is the Iraqi government’s main conduit for international transactions but provides few loan options or other services. The top trio have been used mainly for paying salaries and pensions to eight million Iraqis.
The bustling streets of Iraq’s biggest cities are lined with private and public banks that promise investment and credit. But businesses barely use them and individuals don’t trust them.
“Iraqi banks today are still so far away from global standards,” said Abbas Anid Ghanem, an Iraqi economist and lawyer based in the southern city of Diwaniyah.
The problems date back decades, Ghanem told AFP.
In the 1990s, Iraq was isolated from the outside world by crippling sanctions on then-dictator Saddam Hussein that blocked financial transactions with the country.
Following the US-led invasion in 2003, widespread looting saw bank vaults emptied of any cash, even as businesses from around the world were flying into Iraq to sniff out reconstruction deals.
More than 70 banks have popped up since, but the sector as a whole remains underdeveloped.
The three largest – Al-Rafidain, Al-Rasheed and the Trade Bank of Iraq (TBI) – are state-owned and hold around 90 percent of the entire sector’s assets, the World Bank said in 2018.
The first two suffer from “capital deficiencies and asset quality problems”, the World Bank said, meaning they are short on deposits and have risky credits.
TBI was established in a 2003 decree issued by the Coalition Provisional Authority, which managed Iraq post-invasion.
“TBI was meant to help Iraq develop and rebuild, but it was affected by sectarian power-sharing and financial corruption,” said Ghanem.
Now, the bank is the Iraqi government’s main conduit for international transactions but provides few loan options or other services. The top trio have been used mainly for paying salaries and pensions to eight million Iraqis.
