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The Islamic State group is handing out money to the poor in in Mosul and northern Iraq in an attempt to ensure their loyalty, according to local sources.

The sources told al-Araby al-Jadeed on Friday that IS had given grants ranging between $400 to $800 to hundreds of families who lined up at the social welfare building of the Ministry of Labour in Mosul.

The sources also said that IS told those seeking aid not to spend the cash in the provinces and areas under the control of the Iraqi government.

IS members had also issued food rations and discount cards to residents in Mosul, and were providing aid to the sick and those in need of hospital treatment.

The head of Baghdad's chamber of commerce, Maher al-Habeib, told al-Araby that the financial grants provided by IS were a response to rising civil discontent in the areas the group controlled.

"These grants could be considered as propaganda aimed at gaining new recruits or at creating an image of a 'caliph' who shares their wealth with the people," Habeib said.

Meanwhile, the Iraqi Ministry of Migration and Displacement had announced grants of $800 to hundreds of families who fled IS-controlled areas and sought refuge in Karbala and Dohuk.

Meanwhile Hoshyar Zebari, Iraq's finance minister, announced on Thursday that the government was planning to raise taxes to help plug a $20bn hole in its budget.

Iraq is undergoing a financial crisis brought on by a decline in the oil revenues. Global prices have fallen by more than 50 per cent since June 2014.


This is an edited trabslation of the original Arabic.