Kiva conducts regular, ongoing monitoring of all Field Partners, but only posts status updates here in response to relevant, major changes at the partner.
Status update — February 19, 2019
After 2 years of partnership and nearly 4 years of ongoing efforts to work with Izdiharona to collect the outstanding $1,439,120 owed to Kiva lenders by this organization, Kiva has decided to default Izdiharona's balance and to close this partnership account. Because we have concluded that the organization will not repay Kiva lenders the amount owed, additional Kiva investment in legal resources is no longer currently worthwhile.
Since Izdiharona first fell behind in payments in 2015, Kiva has remained in contact with the organization, worked with a number of banks, and engaged with US and Iraq-based lawyers and other third parties to try to facilitate repayment of funds owed to Kiva lenders. While there are a number of challenges to operating in Iraq that complicate the process of repaying Kiva, Izdiharona has not displayed a willingness to repay.
Kiva's policy is to consider legal options in a situation such as this, where the Field Partner is non-responsive to Kiva's requests for repayment, despite the partnership agreement. However, after careful assessment of the lengthy actions taken to date, we have concluded that it is very unlikely that formal legal action in Iraq would result in recovery of lender funds. We retain the option to pursue legal action in the future should that assessment change or new developments arise. For more information on the default risk of Kiva loans, please visit Kiva's Risk and Due Diligence center.
Status update — April 27, 2018
Having reached the conclusion that Izdiharona is in willful default of their loan obligation to Kiva (see update below), Kiva has begun exploring alternative options to collect funds owed to Kiva lenders. We have contracted the services of an external debt collection agency to help retrieve lenders’ outstanding balance with Izdiharona. This agency has made contact with the partner and we will provide more details on this page as we know more about the likelihood of recovery of funds.
Status update — September 29, 2017
Over the past months, Kiva has continued to monitor the challenging operating environment in Iraq while also working with experts within the country to find alternative means for Izdiharona to repay the funds owed to Kiva lenders. Unfortunately, Izdiharona has been unwilling to accept the solutions proposed by Kiva, which we believe would have resolved the situation. As a result, we have reached the conclusion that Izdiharona is no longer committed to working with us to reach a resolution and that they are willfully in default of their loan obligation to Kiva. We are continuing to follow up on possible options to collect funds owed to Kiva lenders and will post updates to this page as they develop.
Status update — April 7, 2017
The economic and financial conditions in Iraq continue to make collecting repayments from Iraq challenging. Because we have not seen any sign that these restrictions will be lifted, Kiva has begun to explore alternative means of payment that would allow us and Izdiharona to repay the funds owed to Kiva lenders. We are in contact with experts in Iraq to assist us in this process and while we do not have a timeline at this point, we post updates as we have them.
Status update — August 24, 2016
Kiva continues to be in regular contact with Izdiharona staff, and other contacts in Iraq to monitor the situation at the MFI and in the country to pursue repayment of funds owed to Kiva. At this time we unfortunately do not have a timeline as to when we expect these economic and financial conditions in Iraq to change, but Kiva will continue to monitor the situation and with the goal of working to maximize the recovery of lender funds.
Status update — January 28, 2016
Kiva staff met with Izdiharona’s Executive Director at a regional conference in October 2015 and he confirmed the organization’s willingness to repay Kiva once government restrictions on transfers of funds out of the country are lifted, allowing repayment to Kiva to occur. That said, at this time we unfortunately do not have a timeline as to when we expect these economic and financial conditions in Iraq to change, but Kiva will continue to monitor the situation and with the goal of working to maximize the recovery of lender funds.
Status update — July 14, 2015
Kiva initially stopped Izdiharona from posting new loans to the site in August 2014 due to questions about their adherence to Kiva's operating requirements. As noted in our last update, Izdiharona later informed Kiva that they’re unable to send funds to Kiva due to government restrictions on capital transfers out of the country, effective March 2015, at which time the partnership was paused. Iraq is a difficult environment to operate in, given the day-to-day challenges posed by ongoing conflict in this region. Kiva has followed up with other actors in microfinance in Iraq and confirmed that other organizations have also had trouble transferring funds out of the country. We will remain in regular contact with this partner and will post updates to this page as the situation evolves.
Status update — March 16, 2015
Kiva's partnership with Izdiharona has been paused. Izdiharona has informed Kiva that their local bank placed a stop on their attempts to send funds to Kiva. Izdiharona says that the Central Bank of Iraq (CBI) has not approved the transfer, which they hypothesize might be due to efforts by the CBI to impede the flow of funds from NGOs within Iraq to investors based outside the country. Kiva has been following up regularly with Izdiharona and has also reached out to other prominent organizations well acquainted with the Iraqi microfinance industry and a local attorney to determine the feasibility of these claims. To date, we have not uncovered any cases of this occurring with other organizations in Iraq. Kiva is currently seeking a proper avenue for making a formal inquiry with the CBI. Kiva will continue to follow up with Izdiharona to maximize the recovery of lender funds, and will share updates with Kiva lenders as the situation changes.
Izdiharona for Economic Development is a nonprofit organization in Iraq that provides financial assistance to small and medium enterprises in need of capital and to individuals to generate income and improve their quality of life. Founded in 2008, it currently operates ten branch offices throughout Iraq in the provinces of Baghdad, Babil, Basra, Karbala, Messan, Sulaymaniyah and more.
The organization is dedicated to providing financial services to help develop the Iraqi economy, which includes a vast number of small and medium enterprises. Izdiharona's financial products are designed to reach existing businesses, startups and individuals. And it prioritizes serving members of the most vulnerable groups in the Iraqi population.
Izdiharona works with clients who are typically marginalized or underserved by mainstream financial institutions and existing MFIs. Without loans, these entrepreneurs would not have the working capital needed to start or grow their businesses. Kiva lenders’ funds are used to provide education, startup, green, and youth loans, as well as interest free loans to the ultra poor and loans that support income generating projects for women.
A unique lending approach:
Since its inception, the organization has specialized in agribusiness and micro-business loans supporting farmers and micro entrepreneurs. Today, it has expanded its services, offering small and medium enterprise loans to entrepreneurs, home improvement loans, solidarity loans, youth loans and more.
Izdiharona has a track record of serving the needs of many of the most vulnerable populations in Iraq. 68% if its portfolio consists of micro loans between $300 and $2,999, and it continues to have the lowest average loan size compared to other MFIs in Iraq.
Additionally, women are playing an increasingly important role in the economic development of the country, and with 35% of its portfolio consisting of female borrowers, Izdiharona has the highest percentage of female clients of any financial institution in the country.
The organization works in a truly post-conflict environment. Nine out of its ten branches are located outside Kurdistan, in regions including the high-risk areas of Baghdad and central and southern Iraq. In 2012, Izdiharona implemented the Iraqi Vulnerable Groups Support initiative, disbursing loans ranging from $500 to $5,000 to Iraqi individuals disadvantaged due to their gender, religion, ethnicity, location or nature of their business activity. Through this program Izdiharona had supported 424 clients with over $1 million in loans.
Repayment Performance on Kiva
|This Field Partner||All Kiva Partners|
|Start Date On Kiva||Aug 9, 2013||Oct 12, 2005|
|Amount of raised Inactive loans||$0||$2,270,625|
|Number of raised Inactive loans||0||4,012|
|Amount of Paying Back Loans||$0||$160,510,475|
|Number of Paying Back Loans||0||190,051|
|Amount of Ended Loans||$2,334,750||$1,470,379,745|
|Number of Ended Loans||949||1,944,841|
|Amount in Arrears||$0||$16,081,753|
|Number of Loans Delinquent||0||54,841|
|Amount of Ended Loans Defaulted||$1,439,120||$25,169,930|
|Number of Ended Loans Defaulted||885||62,990|
|Currency Exchange Loss Rate||0.00%||0.41%|
|Amount of Currency Exchange Loss||$0||$7,245,579|
|Amount of Refunded Loans||$8,200||$9,499,275|
|Number of Refunded Loans||3||8,858|
Loan Characteristics On Kiva
|This Field Partner||All Kiva Partners|
|Loans to Women Borrowers||55.68%||77.46%|
|Average Loan Size||$1,491||$390|
|Average Individual Loan Size||$2,094||$601|
|Average Group Loan Size||$3,207||$1,800|
|Average number of borrowers per group||3||8|
|Average GDP per capita (PPP) in local country||$7,100||$5,664|
|Average Loan Size / GDP per capita (PPP)||21.01%||6.89%|
|Average Time to Fund a Loan||5.57 days||8.13 days|
|Average Dollars Raised Per Day Per Loan||$267.63||$48.00|
|Average Loan Term||11.68 months||11.36 months|
Journaling Performance on Kiva
|This Field Partner||All Kiva Partners|
|Average Number of Comments Per Journal||0.00||0.03|
|Average Number of Recommendations Per Journal||0.00||0.67|
Borrowing Cost Comparison (based on 2013 data)
|This Field Partner||Median for MFI's in Country||All Kiva Partners|
|Average Cost to Borrower||28% PY||27.00% PY||26.62% PY|
|Profitability (return on assets)||6.1%||16.7%||-0.18%|
|Average Loan Size (% of per capita income)||N/A||26.00%||11.58%|
Country Fast Facts
- Official Language:
- Arabic (official), Kurdish (official), Turkmen, and Assyrian
- Avg Annual Income:
- Labor Force:
- agriculture: 21.6%, industry: 18.7%, services: 59.8%
- Population Below Poverty Line:
- Literacy Rate:
- Infant Mortality Rate (per 1000):
- 37.53 deaths
- Life Expectancy:
- 71.42 years
Field Partner StaffArafat Dajani