The U.S. Agency for International Development is hoping to kickstart Iraq's war-torn private sector with a $250,000 microfinance loan program for local entrepreneurs.
The loans, which are capped at $5,000 each, are set to be offered to more than 600 small businesses in Baghdad, where the dismantling of the Iraqi army has caused widespread unemployment, according to the agency.
Focusing on opportunities for women and disadvantaged groups, the loans are expected to create some 1,320 new jobs over the next year and a half.
Applications from local businesses will be overseen by an Iraqi non-governmental organization. The agency plans to work with the U.S. military and local authorities to create similar micro-financing institutions throughout the country. Past USAID lending initiatives have already worked with businesses ranging from candy stores to sewing shops.
The loan programs are part of Izdihar -- meaning "prosperity" in Arabic -- the agency's private sector development program in Iraq launched in September 2004.
As part of that effort, the agency has already awarded more than $2.7 million in grants to 323 small and midsize Iraqi businesses, USAID figures show.
The goal of the new program, which provides computer training, office furniture, and other business resources, in addition to grants, is to re-establish a strong market-based economy in the country by promoting privatization, open markets, capital investment, and business skills, among other initiatives.
"Developing a vibrant private sector in Iraq is essential to the establishment of long-term economic growth, employment, and the creation of a nation of stakeholders," according to an agency statement.