ILO-KfW Visit to the Minister of Labor and Social Affairs, Formalization of the SME Financing Partnership, and First Steering Committee of the SME Development Project in Iraq

The International Labour Organization (ILO), together with the German Development Bank (KfW), conducted a high-level visit to the Minister of Labour and Social Affairs, Mr. Ahmed Al Asadi, to provide updates on the progress of the joint project, “Promotion of the Development of Small and Medium Enterprises (SMEs) in Iraq,” funded by the Federal Republic of Germany through KfW Development Bank. During the meeting, KfW announced an additional €20 million in funding to expand its support for SME lending initiatives in Iraq.

Mr. Ahmed Al Asadi, the Minister of Labour and Social Affairs, emphasized the significance of this project as said “Strengthening small enterprises is essential for fostering a more equitable and inclusive economic future. Through collaboration with our partners, we strive to equip young people and women with meaningful opportunities to unlock their potential. By providing assistance and improving access to sustainable financial services, we enable them to unlock new employment opportunities for themselves and others, ensuring wider economic participation.”

Marc-André Hensel, KfW Country Director for Iraq, highlighted KfW’s strong commitment to the initiative during the meeting and stated “We are pleased to see the tangible progress this project has achieved in laying the groundwork for a viable SME financing system in Iraq. Based on this success and the continued commitment of national partners, KfW is increasing its contribution by an additional €20 million. This reflects our confidence in the project’s direction and our joint ambition to boost private sector development and employment across Iraq.”

The visit marked a significant step forward in strengthening Iraq’s SME sector and enhancing its potential for sustainable job creation and private sector growth. Maha Kattaa, ILO Iraq Country Coordinator, presented the project’s achievements to date, underscoring the establishment of a solid infrastructure to facilitate SME financing.

In conjunction with the visit, the ILO, in collaboration with the Ministry of Planning (MoP) and the Ministry of Labor and Social Affairs (MoLSA), hosted a formal event titled “Formalization of the SME Financing Partnership.” The event featured a signing ceremony with Participating Financial Institutions (PFIs), including the National Bank of Iraq, Bank of Baghdad, Al Mashreq Al Arabi Bank, and First Finance Company. Key stakeholders such as the Central Bank of Iraq, the Iraqi Private Banks League, the Iraqi Federation of Industries, and the Federation of Iraqi Chambers of Commerce also participated actively in the event.

Sabah Jondi, Director General of the Economic and Financial Policies Department at the Ministry of Planning, expressed strong support for the initiative: “This partnership supports sustainable employment and social protection by linking responsible investment and financial tools to fair development. It also strengthens collaboration between Iraqi financial institutions and the ILO to build a robust and inclusive economy.”

Later in the day, the project convened its inaugural Steering Committee Meeting, bringing together representatives from MoP, MoLSA, KfW, and the ILO. The committee will provide strategic guidance to ensure the effective implementation and monitoring of the project.

Maha Kattaa highlighted the broader significance of the initiative: “This project represents a vital commitment to unlocking the potential of Iraq’s SMEs as engines of decent job creation and inclusive growth. By improving access to finance and strengthening the entrepreneurial ecosystem, particularly for youth and women, we are laying the groundwork for a resilient and equitable economy. The project has already succeeded in establishing a solid infrastructure to support SME financing, which is a critical foundation for long-term impact.”

Osama Alkhafaji, Director General of the Department of Labour and Vocational Training highlighted the importance of the project, saying, "I believe that empowering small enterprises is the key to building a fairer and more inclusive economic future. We work with a humanitarian spirit to provide young people and women with a genuine opportunity to realize their potential by supporting them and facilitating their access to sustainable financial services, so that they can become the agents of change in their homeland."