Survey of the Microfinance Sector in Uzbekistan

This paper, a diagnostic survey of the legal environment for microfinance in Uzbekistan, is prepared by the International Finance Corporations Microfinance Legislation Development Project (MLDP), and is co-financed by USAID.

The paper presents an overview of the microfinance sector in Uzbekistan to develop recommendations for consideration by the Government of Uzbekistan (GOU).

The key findings of this paper are:

• Despite the difficult commercial environment in Uzbekistan, microfinance is growing;
• There is a wide intra-country disparity in Central Asia (Uzbekistan, Tazakhistan and Kyrgyz Republic) as far as widening and deepening of financial services is concerned;
• The NGO microfinance sector penetrates to only 3 per cent of the total clients, and is seriously underdeveloped due to:
  • An inadequate and incomplete legal framework,
  • Insufficient funding,
  • Difficult business conditions.
• To improve access to credit for micro and small businesses:
  • Support to the credit union movement is crucial,
  • The Government's targeting microcredit programs through commercial banks is a way ahead.

The paper describes how International financial institutions like ADB, USAID and WOCCU support the microfinance sector in a variety of ways, including technical assistance programs and dedicated microlending credit lines.

Lastly, the paper provides a detailed summary of 10 NGO-MFIs in Uzbekistan, regarding their:

• History;
• Number of clients;
• Loan outstanding;
• Methodology of operation;
• Financial products offered.