Image via WikipediaA new initiative has been taken by the Iraqi government hoping to secure the Iraqi funds and escalating the rather unused banking sector of the country. It is hoped that this move will provide better revenue, and with more transactions boost profits in the sector. The governor of the Central Bank of Iraq, Sinan al-Shabibi, spoke to the media asserting that "It's a very important project" in terms of "increasing the capacities of private banking." This initiative is led by the Central Bank and backed by the help of USAID; Shabibi hopes this will be project ready for implementation "in the coming year".
Only 20% of adult Iraqi citizens keep banking accounts, which is marked as very ‘lower than the average’ rate for any developing country, stated in a report of World Bank. The report published last year also mentioned that, on average 81% of adults in any other developed countries have their own bank accounts.
"It can be attributed to long period the country was at war, international sanctions, isolation from the outside world, prevailing security situations, coverage of banks in remote areas," suspected a banking expert employed as a consultant for the Trade Bank of Iraq, Indrajit Roy Choudhury. He also mentioned that lack of modern banking facilities along with the poor know-how of finance keeps the Iraqis' alluded. Most Iraqis prefer to be paid in cash, while others who even receive their salaries in the shape of a cheque, have the practice to withdraw it fully in cash at once.
This new initiative is aimed to get the relative popularity of the use of cellphones in Iraq, to beef up the development of the banking sector in the country. Carl Rosenquist, an expert working on this project, suspects that perhaps the younger Iraqis will be keener to make use of this initiative.
The project outlines that users will be able to open new bank account only using cellphones, and also be able to make most transfers, pay bills, withdrawals or any other transaction through non-banking agents on the phone. Local banks and mobile phone operators are already engaged to get on board for the development of mobile banking. The C.E.O of the primary cellphone operator in the country, ZAIN’S, acknowledged that the company was negotiating with two Iraqi banks in this regard already. This project will only be a fraction of a larger overall project to improve Iraqi banking on the whole, having an approximate cost of $15 to $20 million.
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