Iraq Microfinance Industry Performance & Benchmarking to MENA MFIs and All MFIs Iraq Second Microfinance Workshop

1. Iraq Microfinance Industry Performance & Benchmarking to MENA MFIs and All MFIs Iraq Second Microfinance Workshop June 9, 2007

2. Microfinance Institutions Operating in Iraq • Ninewa Business Center (NBC) in Mosul – providing technical assistance • and soon to be providing loan capital • Forthcoming is Madinat Al-Takadum (Al-Qaim) and Amaluna (Baghdad) • in July 2007 • Under consideration is Tagi, Habbaniya, Baghdadi and Ramadi

3. Snapshot of MF Industry in Iraq Total Number of Employees = 425 Total Number of Loan Officers = 130

6. Loans Disbursed Since Inception 8,129 14298602 46 59,500 6577 15,566,241

7. Average Loan Size by Province Since Inception

8. Average Loan Size Disbursed Since Inception Average Loan Size Outstanding

11. Loans Disbursed to Women Since Inception 854 1,604,215 1059 1571451 3 2700

14. Baghdad Loans Disbursed by District

15. Baghdad Map Thawra Kathmia A’thamia 9 Nissan Rusafa Mansour Karkh Karada Jihad/Baiya Dura

20. Iraq MFI Industry Findings • SME and Housing loans represent the highest percentage of loans by sector • Agriculture loans represent < 1% of total portfolio • The PAR > is increasing and loans in arrears are moving to the higher aging classification • While the portfolio is growing, the number of loans to women is not • There is a balanced regional distribution in Basra, Karbala, Najaf, Kirkuk and Suleimaniya • Basra is the highest value of loans outstanding as of Apr ‘07 • No new loans in Ba’quba and Mosul due to security reasons • Baghdad loans outstanding is decreasing, and the concentration is in 2 - 3 districts • Baghdad PAR>180 days is increasing, represented in 12.7% of the Outstanding Loan Portfolio in Baghdad for period ending April 2007

21. Benchmarking:Comparing Iraqi MFIs to All MFIs and MENA MFIs

22. LEBANON MOROCCO TUNISIA Palestine JORDAN EGYPT YEMEN

23. Legal Status Iraq MFIs MENA MFIs

24. Active Clients by Legal Status Iraq MFIs MENA MFIs

28. ** The ratios are low because they are quarterly figures for 1st Qtr 2007

29. ** The ratios are low because they are quarterly figures for 1st Qtr 2007

31. Total Arab Microfinance Industry – Excluding Government & Unemployment Programs 30/9/05 TOTAL Excl. G&UP $1,216,772 $355,880,385 $292 90.2% % of TOTAL 77.6%

32. Conclusion & Findings • Despite its young age and the critical security situation in Iraq, the microfinance industry has achieved progress • Operational Sustainability at 114.9% • Number of active borrowers is commendable taking into consideration the Iraq MFI started operation less than four years ago & the country is in internal strife & security has deteriorated • The Iraq MFIs are making efforts in maintaining sufficient Loan Lose Reserves in line with international standards

33. Conclusion & Findings (cont’d) • The total PAR is a concern (PAR should not exceed 5%) • Outreach to women is limited in Iraq compared with other MFIs in the MENA region and globally • Return on Assets and Equity is low • 90% of the PAR>30 days is more than 90 day in arrears, compared to the 40% of the Arab MFIs.

34. Thank you! Questions & Discussion