Erbil, 9 December 2007

Speech by KRG Prime Minister Nechirvan Barzani

Dear guests, good morning and welcome to this event.

I am pleased and privileged to be here with you today to announce the opening of the Bright Future Foundation (BFF) for Microcredit in the Kurdistan Region.

With this programme thousands of people in our region with benefit from small loans which will improve their living standard through small business projects.

The concept of microcredit is spreading quickly around the world. It helps to provide short-terms loans. This system will help people to develop new business projects or expand already existing businesses.

If we look at the Kurdistan Regional Government’s (KRG) programme, we see that the government has promised to reduce unemployment and further develop the private sector. This microcredit system does exactly this.

We support these programmes because we want our people to rely on themselves and their own capabilities. In this way, we show our people that we care about all strata of society.

We want to encourage our people to think of new ways of securing their lives and well-being. It is very important that we all encourage a strong work ethic and collective cooperation. This system also encourages initiative and helps to foster trust amongst the population.

There may be other programmes of this kind in the Kurdistan Region, but the BFF will have a special plan for our region. It will concentrate on fields that have not been the focus of previous work.

Today the system of microcredit has become a global phenomenon. It has helped hundreds of thousands of people all over the world to overcome poverty and establish small, new, productive projects that help guarantee their livelihood.

This idea emerged 30 years ago in Bangladesh. The idea was to make short term financial assistance available to small business owners. These types of loans helped to alleviate poverty and create many jobs in vulnerable areas. After that, this idea spread to other countries and the Grameen Bank was established. Today, five million people benefit from its loans.

Last year microcredit's creator, the Bangladeshi professor Dr Muhammad Yunus, received the Nobel Peace Price for his historic effort in creating a system that benefits millions of people on all five continents.

Today, close to one hundred million people benefit from this loan programme.

In line with the KRG's interest in developing the private sector, supporting our society’s low income families, and encouraging self-confidence and self-reliance, the KRG has allocated five million US dollars as a first step to initiate this activity in the Kurdistan Region.

We are pleased today to see the first group of people who are benefiting from these loans.

Let me highlight some important points about the nature of this microcredit programme.

First, BFF for microcredit is a non-governmental, private sector organisation. It works independently and freely without interference from the government or any political party. All of the foundation's decisions are based on sound financial analysis and commercial principles.

Second, BFF gives loans to individuals and small businesses according to the criteria set by its board of directors. These loans are awarded to people and must be repaid over a defined period of time so that the same money can be used to finance loans to others. The money returned from the first loans will be reused for subsequent loans. In this way, every individual participating in this programme will be responsible for the continuation of the programme. Anyone who does not abide by the terms and conditions is violating a legal contract and harming other people by depriving them of the same opportunity.

Third, we were motivated to start this programme in order to encourage the spirit of creativity and innovation.

Moreover, there is much international financial support to help such programmes.

The general criteria for making loans are:

Those who have small projects they want to enlarge.

Those who submit sound and appropriate plans to expand their business.

Those individuals who have good plans to start new businesses.

The ability to repay the loan within the allotted time.

Part of this money will be allocated to award loans to rural inhabitants, especially to women, in order that they can rely on themselves to start and manage home-based business.

Within the next few days, more details of this programme will be made available and it will be clear to all how to apply for, and benefit from, small loans.

The project will start in Erbil, the capital, and later offices in Suleimaniah and Dohuk will be opened.

We are confident that if we are successful in this effort we will have more funds available to sustain this project.

When we first had the idea to establish this project we looked for a specialised partner with experience in managing projects such as this. I am glad to announce that the BFF has found a well-known partner in the field of microcredit, US-based CHF.

Apart from teaching us the principles of microcredit, this institution has agreed to make a considerable contribution to this programme. That is why, before activating BFF, we are happy to have gained the support and cooperation of CHF.

This is a good opportunity for us to develop a widespread and beneficial network of contacts at the international level. I would like to thank CHF for its readiness to help this project as a full partner. I appreciate their generosity and financial support.

One of the weak points in our society and economic system is the lack of basic economic skills and knowledge. Many of our people are not aware of the key principles of commercial and banking systems. They are not familiar with how to develop business plans, give loans, collect debts, or manage their finances. Our people have not benefited from banks. So far we have been unable to bring an international bank to help people put their money to productive use.

Therefore, one of the merits of this programme is teaching these skills and establishing a proper banking system in our region.

We in the KRG value this programme as an important step. We hope this programme will develop and grow so that hundreds and thousands of families can benefit from it.

We have chosen the name "Bright Future" for this programme because we are optimistic about our future. We believe that this programme will help us achieve our objective.

Again, I would like to thank all the people and groups that have supported us with this initiative, inside and outside the Kurdistan Region.

I thank all the sincere efforts that have led to the success of this project.

I thank the Minister of Finance and Economy for his effort in this regard.

I extend special thanks to Mr Hoger Shali, and all of his colleagues, for their efforts and hard work over the past year. From the first instance we have tasked Mr Shali to supervise and run the foundation. He has formed a capable team to professionally run the foundation. I wish them success.

Again, thank you very much for coming.

See also the press release on the launch of the Bright Future Foundation microcredit programme.