This study examines the impact of financial inclusion on sustainable development in Iraq, focusing on both economic and social indicators. Against a backdrop of longstanding political instability, economic fragility, and institutional challenges, Iraq presents a unique context in which financial exclusion exacerbates poverty, inequality, and limited access to financial resources. Using a descriptive-analytical approach, the research analyzes data from seven Iraqi banks to assess the relationship between financial inclusion indicators—such as credit growth, electronic services, and bank account ownership—and sustainable development indicators, particularly Return on Assets (ROA) and Return on Equity (ROE). The findings reveal a significant positive short- and long-term impact of financial inclusion on ROA across most banks, indicating that enhanced access to financial services improves operational efficiency. However, the effect on ROE was limited or insignificant in several cases, suggesting that equity performance may depend on broader structural factors. The study underscores the need for improved financial infrastructure, enhanced digital banking services, and targeted lending programs to strengthen financial inclusion and advance sustainable development in Iraq. Recommendations include enhancing loan quality, promoting SME financing, and integrating financial inclusion into national development strategies.