From Startup to Success: USAID CATALYZE Iraq Access to Finance Helps Tackle Iraq’s Youth Unemployment Crisis by Increasing Lending to Small- and Medium-Sized Enterprises
In Iraq, limited financing to the private sector — which makes up just nine percent of GDP — is a major barrier to economic growth. Small- and medium-sized enterprises (SMEs), which comprise the majority of private sector employment in the country, and youth, who make up more than half of Iraq’s population but face staggering unemployment rates, are particularly affected by this shortage.
By partnering with local financial institutions to facilitate access to loans and credit for SMEs, USAID CATALYZE Iraq Access to Finance (A2F) — an Activity under USAID CATALYZE — is creating new employment opportunities for youth, while simultaneously increasing private investment and driving private sector competitiveness in Iraq. Read on to learn about two individuals who have benefited from the project.
Ataar Al Pharmacy
Inspired by her extensive background as a pharmacist, 41-year-old Farah Kamal Abood opened the Baghdad-based Ataar Al-Farah Pharmacy in 2015. The business quickly became a reliable source of income and allowed her to support herself independently while also providing for her mother, younger sister, and grandmother.
As the demand for chronic disease medications grew, Farah recognized an opportunity to expand her inventory to better meet her customers’ needs — but found it difficult to obtain financing to do so. Banks required substantial collateral, which was beyond Farah’s means. Without access to capital, she faced the risk of stagnation, struggling to maintain her current level of service and unable to grow her business.
“It was a difficult period,” Farah said. “I knew expanding my inventory was crucial, but the financial barriers seemed insurmountable. I didn’t want to let my clients down, but I wasn’t sure how to overcome these obstacles.”
In July 2024, Farah secured a US$60,000 loan through CATALYZE A2F and CATALYZE partner the National Bank of Iraq (NBI), which allowed her to purchase high demand chronic disease medications for conditions such as diabetes and heart disease, which were previously scarce in her pharmacy. This investment allowed her to not only meet customer demand but solidify her market position by retaining and growing her clientele. As a result, Ataar Al-Farah Pharmacy’s monthly revenue is expected to increase by up to three percent and has become more competitive in the local market.
Farah plans to hire two additional young pharmacists from the community.
“Receiving the right [financial] support at the right time gave me the courage to keep moving forward,” she said.
Al-Yousif Laundry
At just 20 years old, Harith Ziyad Ahmed was providing for his family of five by working at his uncle’s laundry business in Baghdad, Iraq, where he had spent much of his adolescence diligently learning the trade.
“I remember watching my uncle work tirelessly in his small laundry shop,” Harith recalls. “Even as a child, I admired his commitment to his craft and the respect he earned from the community. I knew that if I worked hard enough, I could one day have a business of my own. But there were days when I wondered if I would ever be able to make my dream a reality. Still, I never gave up.”
In 2022, Harith took the first step toward realizing his dream: he used his personal savings to open his own small laundry business, Al-Yousif Laundry. His hard work and dedication paid off — within two years, he had built a loyal customer base and earned a reputation for quality service within his community, which led to a growing demand for his services. Harith’s initial success provided an opportunity to expand, but he faced a significant barrier — limited access to adequate financial resources. Without substantial collateral required by banks, Harith could not obtain the credit needed to power his business’s growth.
In 2024, Harith connected with CATALYZE A2F through CATALYZE financial institution partner Iraqi Company for Financing SMEs and was able to secure a loan of US$15,000. The loan allowed him to successfully relocate his business to a larger, better-equipped location, increase his income by over 25 percent, and hire two local youth.
“The loan helped me scale my business through tough times,” Harith said.
The respective successes of Harith Ziyad Ahmed and Farah Kamal Abood are a testament to the impact of SME lending on individuals and their communities — particularly Iraq’s youth population, who faced a 32 percent unemployment rate in 2023. Through this approach, A2F aims to address common barriers faced in the commercial finance sector, which will ultimately contribute to improved growth and stability within Iraq’s financial sector.
By September 2025, CATALYZE A2F expects to mobilize US$9 million in private sector capital for at least 366 Iraqi SMEs, driving economic growth and helping over 561 Iraqi youth to find better employment. Read more about CATALYZE A2F here.
