Iraq Social Fund for Development

The development objective of the Social Fund for Development Project for Iraq is to: (i) improve access to basic services and; (ii) to increase short-term employment opportunities, in targeted communities. The project will include three components (with a US 4.25 million dollars in contingency costs) as follows: First component, Financing Community Sub-projects is to improve access of communities to basic services. It will finance subprojects at the local level, that consist of basic essential services that represent priority investments identified by the community. These will be based on a menu that includes investments that can be realized using labor-intensive techniques and maximizing the use of local materials. Second component, Supporting Microfinance Systems Strengthening is to support the establishment of the overall MSE program of SFD through technical assistance and capacity building activities. Support will be provided to the Government of Iraq on: (i) enhancing capacity to manage MFIs that will be engaged under the SFD in the future; (ii) reviewing the regulatory environment to allow MFIs to function without market distortions; and (iii) developing a framework for structured financing that would allow the flow of funds from SFD to MFIs in a sustainable manner, while meeting SFD objectives. Third component, Capacity Building and Institutional Development will provide overall implementation and project management support for the duration of the project, to the establishment and operation of the SFD. This will include: (i) supporting MOP in managing the SFD functions during the establishment phase and project management activities; (ii) providing institutional development for the eventual SFD autonomous institution; (ii) building the capacity of local government, community groups, and NGOs; and (iv) contracting NGOs to undertake social and economic assessments for local communities.