After years of devastation from the 1989 and 2003 Gulf Wars, Iraq’s poultry industry is starting to undergo a revival, and local banks have actively begun to expand business with Iraqi companies. This new interest by bankers gives a boost to the credit guarantee program offered by the U.S. Grains Council.
The program, formulated in 2005 as a Food for Progress project, is designed to encourage Iraqi banks to become involved in the business of financing agricultural imports, thus lowering the cost of those loans, making essential poultry feed ingredients more available and less expensive in Iraq and thereby stimulating poultry production.
The idea was to share with a lending bank the risk of a qualified loan.
Until now, Iraqi banks have been slow to take advantage of this program. According to Erick Erickson, USGC special assistant for planning, evaluation and projects, and Chris Corry, USGC senior director of international operations, interest is finally starting to pick up. Erickson and Corry traveled to Amman, Jordan, last week to promote the credit guarantee program and learned that the two Iraqi banks participating in the program are now cultivating closer business ties with trading and poultry production companies and consider the loan guarantee program an important part of the array of banking services they can offer.
“We recognized that our efforts over the past several years have been ahead of their time, but now things are falling into place,� Erickson said. “Banks themselves are ready to promote our credit guarantee program as part of the package of services they can provide Iraqi poultry companies. At last, the banks themselves will drive the future of our program.�
There is a new sense of optimism among the businessmen Erickson and Corry met. One participant in particular observed that the poultry industry in Iraq is poised to grow rapidly within the next two years, and some of the Council’s other partners noted that the credit program may be too small to meet the future demand.
Written by Jodi Kiely, USGC Contributing Writer