Baghdad: Prime Minister Mohammed Shia al-Sudani has directed the cancellation of the guarantor requirement for loans intended to purchase housing units for employees whose salaries are domiciled in banks.

According to National Iraqi News Agency, a statement from the Prime Minister's Media Office highlighted the government's initiative to expand housing ownership opportunities for citizens. This initiative aims to support middle and low-income classes and stimulate the construction and insurance sectors. The directive involves eliminating the need for a guarantor when government employees apply for housing loans, provided their salaries are domiciled with a bank.

The proposal, developed by a collaborative team from the Prime Minister's Office, the Central Bank of Iraq, the Insurance Bureau, and representatives from both public and private banks, seeks to simplify housing lending mechanisms. It offers an alternative to personal guarantees by introducing an insurance policy against default, covering the loan's entire term and amount. This insurance policy would be issued by an insurance company licensed by the Iraqi Insurance Bureau.

The Prime Minister's directive is expected to expedite lending transactions, minimize administrative hurdles, and enhance the banking portfolio's quality. Additionally, it aims to support the construction and housing sectors, stimulate the labor market, and promote financial inclusion by encouraging interactions with the formal banking system.

The measure is part of the government's broader goals to enhance economic stability, boost productive and service sector activities, and provide decent housing for citizens. It aligns with the financial and economic reform programs that have been making significant progress in their implementation.