Thursday, April 12, 2007

Microfinance in Iraq?

First, a disclaimer- the image is of a woman benefitting from microfinance in the Phillipines- not in Iraq- I pulled this photo off of a U.N. site.
I was curious about one concept as we prepare for Iraq with cultural training- we have been taught in some of our readings that in the Muslim faith, banks are rare because of a faith tenet that one should not charge fixed interest rates for loans or something to that effect. Have micro-credit and micro-finance initiatives been tried in Islamic countries? If so, what were the outcomes? What if such activities were tried in Iraq, where there is arguably a more “ecumenical” approach? During Saddam’s time, he tried to build a less religiously oriented culture with separation of church and state, but that is less true now with religious sectarianism reintroducing religion into the day to day of governance. What I found out in a briefing last week however, is that microfinance initiatives have been started there in Iraq- they work around the interest problem by having "loan origination fees paid over time." As the Guiness Draft beer commercial guys would say, "Brilliant!" I hope my old instructor for 3rd World Development hears about it- Cheers, Warner!

Some microfinance websites:

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