Building Economic Prosperity in Iraq, One Small Loan at a Time

Nada KhoudairFor a long time, Nada Khoudair considered herself an ordinary housewife and mother who took pride in her role of taking care of her family. But her view of herself altered dramatically when her husband passed away and she found herself the sole breadwinner for herself and her son. She rose to the challenge and opened a small hair styling salon. The space was small and needed a lot of renovations, but she was determined to make it work so she could support herself and keep her son in school.

Nada was barely covering her expenses when she learned about CHF Vitas Iraq, a finance institution that provides small- and medium-sized loans to Iraqi entrepreneurs and homeowners. The first loan she took out allowed her to purchase modern equipment for the salon. After she repaid the initial loan, she secured a second loan which she used to redecorate the salon and make it more inviting to clients.

Addressing Gaps in the Credit Market

For years, Iraq’s small entrepreneurs and homeowners were excluded from mainstream financial services. Because traditional bank loans were very difficult to obtain, people like Nada could either borrow from family or friends or rely on local moneylenders who charged prohibitively high interest rates. To help fill this credit gap, Global Communities created the Access to Credit Services Initiative (ACSI), now operating as CHF Vitas Iraq. ACSI was established just after the fall of Saddam Hussein’s regime in 2003 with the goal of promoting the economic reconstruction and stabilization of Iraq.

Since then, CHF Vitas Iraq has become the largest microfinance institution in Iraq with 14 branches in 11 governorates. CHF Vitas Iraq, which focuses on providing equal access to financial services for underserved groups like women, youth and people with disabilities, strives to respond to clients’ needs and foster the long-term development of individuals, their businesses, their families and their communities. Since its inception CHF Vitas Iraq has provided nearly 300,000 loans valued at more than $1 billion USD, while maintaining a 98% on-time repayment record.

Aram Kadhen HatumFulfilling Dreams

Aram Kadhen Hatum recently graduated from dentistry school and had always dreamed of owning his own practice. After completing his studies, he found a small clinic in a medical center which he could rent for a reasonable price. With small loans from his family, he opened the clinic, but was only able to afford the most basic equipment in order to begin serving clients. As time passed, it was clear that he needed more investment in order to offer proper services to his customers. With a loan from CHF Vitas Iraq he was able to purchase a professional dental chair and make other improvements to the clinic. Today, his clinic is bustling and he credits the loan from CHF Vitas Iraq with getting him “closer to fulfilling my dreams.”

Nada Khoudair also attributes her current success to the loans she received. She is on her third loan from CHF Vitas Iraq which she used to buy the shop next door and double the size of her business. With her increased profits, she was able to make sure her son successfully completed university. She no longer sees herself as housewife, but as a successful, thriving businesswoman.