Current Banking Trends: Cash Economy and Banking Confidence in Iraq

Nozad Dawood Fattah Al-Jaff, Chairman North Bank, explains the reason behind the lack of confidence in the banking system and subsequent rise in the cash economy.

According to Al-Jaff, “since 2003, more than 30 different licenses have been given to 30 different banks in Iraq. Some of them have done well and have a very clean record and some, unfortunately, have failed in their operations.” These events, along with the history of marginalization of the banking system during the regime, contributed to the emergence of a cash economy in Iraq.

“Today, cash is the safest method both in Iraq and Kurdistan. What we are trying to do is to gain the confidence of the people – the business community and the entire population. We want them to know that if they keep their money with us, it will be safer, we will provide more services, and we will help them with their daily matters and business,” adds Al-Jaff.

There are already signs that people have more confidence in the system. For example, North Bank processed more than 5,000 car loans in 2011 and 2012 so far and this figure will increase as well.

A strong financial system is the backbone of any developed economy. Banks in Iraq need to loan more to jumpstart the economic development and to improve the living standards of the people.
Read more about banking in Iraq and banks in Iraq.</a