Iraq's first digital bank hits 1.3 million customers, 90% unbanked

Summary

• First Iraqi Bank says it now has about 1.3 million registered customers, most of them previously unbanked.
• Digital payments through the bank rose more than 85% between 2024 and 2025.
• Growth signals a shift in an economy where cash has dominated everyday commerce.

The latest

About 1.3 million Iraqis have registered with First Iraqi Bank, the country's first digital lender, and 90 per cent of them had never held a bank account before, founder Kawa Junad told The National. Some 30,000 merchants now accept its services. Digital payment transactions rose more than 85 per cent from 2024 to 2025, and more than 70 per cent in the first half of 2026.

Details

• The bank: FIB is a privately held Iraqi Islamic bank, licensed by the Central Bank of Iraq since 2020 and operating mainly through a digital and mobile model, according to The National. It launched its app in April 2021 and built its base in the Kurdistan region before expanding to Baghdad, Basra, Najaf and Nineveh.
• The early problem: Junad said the hardest part was not technology but persuading Iraqis of the value of banking at all, since most had never needed an account. He described a "chicken and egg" bind: customers needed merchants to accept digital payments, while merchants needed customers first.
• The merchant base: By late 2021, several months after launch, roughly 3,000 small and medium-sized businesses could trade through the app, Junad said. That figure has since grown to about 30,000 merchants using the bank's services.
• Cash displacement: Some businesses using the bank's QR services have moved from almost entirely cash transactions to receiving only about 20 per cent of their payments in cash, according to The National. Roughly 30 per cent of FIB's customer base now uses services such as savings, credit and salary accounts.
• The demographics: Most new customers are aged 18 to 35, Junad said. Iraq's population grew from about 25 million in 2003 to about 46 million in 2024, with roughly 60 per cent aged 15 to 64 and around 36 per cent below 15 — a young base that underpins adoption.
• The money: FIB estimates total new customer acquisitions at 600 billion to 700 billion Iraqi dinars, about 500 million dollars, a month. Transactions have risen 5 per cent month-on-month this year, according to the bank's own figures.
• The next step: Junad said the priority is converting the digital relationship into access to credit, and predicted significant progress by the end of 2026 or early 2027. He did not set out the lending products or the volumes the bank is targeting.
• The regulator: As part of a reform push, the Central Bank of Iraq issued new digital banking regulations in 2024 and licensed several digital banks last year, The National reported. Those licensees are still being established, with no launch dates announced.
• The physical layer: Despite being digital-only by design, FIB uses physical branches as part of its expansion strategy, according to The National — a hybrid approach in a market where face-to-face trust remains a barrier to account opening.

Background

Iraq's economy has long run on cash, with salaries, retail and small-business trade settled largely outside the banking system. Building account ownership from near zero has been a central aim of the Central Bank's recent financial-inclusion push.

Between the lines

The figure carrying most weight is not the customer count but the 90 per cent share with no prior account: FIB's growth is expanding the banked population rather than moving clients between banks. The QR data pointing to cash falling to about 20 per cent of some merchants' receipts suggests behaviour is changing, not just registrations. Credit access remains the untested part.

What's next

Watch whether FIB launches lending products by late 2026 or early 2027 as Junad predicted, and whether the digital banks licensed by the Central Bank last year begin operating.

Source: The National