Access to Finance

Through the EDF IOM has built significant knowledge of the MSME sector, technical expertise, operational reach/capacity, and local relationships (with MSMEs, local authorities, bankers, training providers, and other stakeholders). IOM has conducted market research to understand MSME behavior (particularly relative to financing business activities), perception of formal sector financial institutions, knowledge of current financial services offerings in their localities, business outlook and growth plans, and needs/requirements/preferences/constraints relative to accessing commercial loans and other formal sector financial services.

IOM’s Access to Finance (A2F) programme connects SMEs with commercial financing. IOM’s parallel approach provides SMEs with advisory services, while at the same time providing capacity building support to partner financial institutions (PFIs).

IOM provides MSME Advisory Services through its continuing interactions with EDF, including training/consultation on business planning, registration/licensing, financial management, and other aspects. MSME Advisory Services also incorporate research and learning activities around MSME ‘investment readiness’ – piloting innovative interventions (in the Iraq context) including ‘commitment-based savings’ products, tailored bookkeeping training, marketing training, and others.

PFI capacity building focuses on MSME product offerings and the customer experience. IOM is working with financial institutions in Iraq to design and promote loan products (inclusive of all needed supporting systems, policies, procedures, documentation, training materials, and other applicable tools) suitable for EDF-supported MSMEs, including customizing the platforms used for data management. IOM is also supporting training for frontline personnel of financial institutions.

The two approaches bridge the gap in providing financial services to MSMEs in agriculture and other sectors, making SMEs more attractive to financial service providers and financial services more attractive to SME owners.

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