ERBIL, Kurdistan Region of Iraq – Iraq is encouraging people to use digital payment systems more often, which could help lower the cost of loans and support the country’s economy, a top government adviser said on Saturday.

Mazhar Muhammad Salih, an advisor to the prime minister, told the Iraqi state news agency that the government wants to reduce the large amount of money people keep at home and instead move it into banks.

“Using digital payments and online shopping helps bring hidden cash into the banking system,” Salih said. “This makes the economy stronger and more stable.”

He said that about 95 trillion dinars out of Iraq’s 109 trillion dinar money supply are kept outside banks. That is nearly 87% of all the money in the country, hampering growth relating to banking activities.

The central bank and the government have started several projects to build trust in digital banking, including fast payment systems, local bank cards, and secure online payment tools.

“The more people use digital payments, the better banks can work,” Salih said. “Banks can then give more loans at lower interest rates.”

Salih also warned about the risks of borrowing money from informal lenders, who are not regulated and charge very high interest rates.

“These lenders are unsafe and often break the law,” he said. “They don’t follow rules, and people can lose money or get stuck with big debts.”

He added that changing people’s habits, such as keeping money at home instead of in a bank, is a key part of Iraq’s move toward a modern, digital economy.