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| Iraq |
| Micro-loan Update |
| 2007-11-12 |
| My big question: What percentage of the $30 million is paid as 'commissions' to the various officials along the money pipeline? 20%? Or more like 99%? Government of Iraq Expands Micro-Loan Program BAGHDAD, Iraq – The Government of Iraq (GoI) has established a program to provide $30 million in micro-loans to Iraqis in each of the 18 provinces. The program is an expansion of a $50 million pilot in Baghdad with extremely successful results. Under the new program, $30 million- $15 million from the Ministry of Labor and Social Affairs (MOLSA) and $15 million from the Ministry of Industry and Minerals (MoIM)- will be used to help spur small business growth and create job opportunities. Under this program, the loans are purposely kept at small amounts to encourage the growth of small businesses. The average loan size is between $4,600 and $9,000, depending on the source of the loan. Based on past results, the program has the potential to create over 230,000 new jobs for Iraqis. MNF-I applauds the establishment of this entirely Iraqi-led program. |
| Posted by:Glenmore |
| #3 The trick is to persuade the government that they will make *more* money high-ending the program than low-balling it. That is, if they rip off the money, they get say $100, but if they use it for patronage, they can maybe get $10,000, and their family and tribe jobs, in the deal. That is the real way to kill corruption, by making it so profitable to not be corrupt that only an idiot does it. It is one of the great hidden maxims of business. |
| Posted by: Anonymoose 2007-11-12 15:41 |
| #2 There's ALWAYS corruption in government aid programs, and it tends to be worse in Islamic countries. That's why my 'optimistic' number was 20%. I just worry the pessimistic number of 99+% might be true, making the whole exercise counterproductive in the long run. |
| Posted by: Glenmore 2007-11-12 13:23 |
| #1 Even if there were no corruption, the administrative cost of these kinds of programs is very high which is why it is preferable to have them run by non-govt. orgs. One kicker here is that interest is forbidden in Islam so in addition to the corruption problem and the administration problem, there are costs involved in creating legal shells to make the money 'halal'. |
| Posted by: mhw 2007-11-12 13:13 |