Iraq financial inclusion challenges remain a serious concern in the Arab region. A new United Nations report showed Iraq ranked near the bottom among Arab countries for access to financial services. The report placed Iraq second to last, signaling deep structural issues in the banking sector.
The study, released by the United Nations Economic and Social Commission for Western Asia, focused on the development of financial access in the region. It revealed that Iraq’s financial inclusion rate reached only 22 percent. This figure measured the ability of citizens to access digital services and formal financial operations.
Iraq financial inclusion challenges stem from long-term instability and conflict. Years of economic uncertainty limited trust in banks and slowed modernization. Many citizens still prefer cash transactions over digital payments. This situation reduces opportunities for broader economic growth.
The report also underlined difficulties across the Arab region. Women remain underrepresented in financial systems. Only 29 percent of women hold a bank account, the lowest rate worldwide. Small and medium enterprises also face restrictions. Only 14 percent have access to loans or credit lines. The global average, by comparison, stands at 29 percent. High borrowing costs and poor banking outreach in rural areas make this gap worse.
In contrast, some Arab countries showed stronger results. Bahrain achieved the highest financial inclusion score at 59 percent. Saudi Arabia followed with 57 percent, while the United Arab Emirates reached 52 percent. These numbers demonstrated that reforms and digital strategies can create better access.
However, Iraq financial inclusion challenges remain severe. With only 22 percent of the population engaged in formal services, the country risks widening the economic gap. Without stronger digital platforms and broader financial education, progress will stay limited. The ranking also placed Iraq just ahead of Mauritania, which shared the same percentage. Other nations such as Syria and Sudan were not included due to missing data.
Observers argue that Iraq needs targeted reforms. Expanding digital banking could help reach rural areas. Lowering borrowing costs would support entrepreneurs and businesses. Strengthening financial literacy could encourage more citizens to trust banks. These steps would raise inclusion rates and improve Iraq’s economic stability.