Shafaq News/ Loans and advances offered by domestic banks rose by 17% in 2023, the Central Bank of Iraq (CBI) reported, saying they contributed to catalyzing the national economy's recovery.
Data released by CBI on Sunday showed that the total value of loans and advances reached 60.8 trillion Iraqi dinars (USD 42.6 billion) in 2023, up by 17% compared to 2022's 51.9 trillion dinars (USD 36.5 billion). 2021 saw even lower figures, with loan and advance disbursements at 46.1 trillion dinars (USD 32.3 billion) and a 7% rate.
Experts believe that building a financial architecture that supports a growing, privatised economy in Iraq is a bottom-up operation. The country remains a cash economy with a thriving black market. Private banks are thin on the ground, lending is sparse and there is no ingrained credit culture. State-owned banks hold 80% of deposits. Earning assets as a share of total deposits is on average less than 5%. Credit to the economy as a percentage of gross domestic product (GDP) is a mere 3.7%, among the lowest in the world. Iraqi business owners and entrepreneurs tend to rely on retained profits, their own wealth, or loans from friends and family.