UNDP efforts towards microfinance development in Uzbekistan 9-11 November 2005 Almaty, Kazakhstan BUILDING SUSTAINABLE MICROFINANCE IN RBEC Community of Practice Workshop Uzbekistan

UNDP introducing microfinance in Uzbekistan In 1998 first pilot micro-credit schemes were launched in Karakalpakstan and Kashkadarya regions In 1998 first pilot micro-credit schemes were launched in Karakalpakstan and Kashkadarya regions UNDP established three pilot microfinance projects with Kashkadarya region and Karakalpakstan branch offices of Business Women’s Association and specialized NGO “Daulet”, provided initial loan funds ($116,000), training and technical assistance for capacity building UNDP established three pilot microfinance projects with Kashkadarya region and Karakalpakstan branch offices of Business Women’s Association and specialized NGO “Daulet”, provided initial loan funds ($116,000), training and technical assistance for capacity building Consolidated performance indicators as of 30 Sept 2005: Policy level: Development of enabling regulatory framework for non- banking microcredit operations (Resolution #309) Policy level: Development of enabling regulatory framework for non- banking microcredit operations (Resolution #309) Active loan portfolio $476,000 Outreach (number of active clients) 4,416 Value of cumulative disbursements $4,532,000 Cumulative number of disbursed loans 46,925 Client poverty level (Ave outstanding balance per client) $108 Ave. loan balance as % of GDP per capita* 6.1%

Lessons learned A wide range of national institutions are required A wide range of national institutions are required Coordination of efforts among donors, MFIs & Government bodies is a necessity Coordination of efforts among donors, MFIs & Government bodies is a necessity Microfinancing is to be in line with Government’s macroeconomic strategy Microfinancing is to be in line with Government’s macroeconomic strategy From operational to strategic vision in MFIs management From operational to strategic vision in MFIs management Lack of awareness and access to information Lack of awareness and access to information Challenges in expanding the geographical outreach of MF services to the distant regions of Uzbekistan Challenges in expanding the geographical outreach of MF services to the distant regions of Uzbekistan

Meeting the challenges of MF development during the International Year of Microcredit, 2005 Joining the quality efforts of all key stakeholders Joining the quality efforts of all key stakeholders  National Committee established  Study tour of rural microfinance organizations  Conference of MFIs in CEE and NIS in Bucharest, Romania Building a strong legislative base acknowledging microfinance as an efficient tool in implementation of the Government reforms: Building a strong legislative base acknowledging microfinance as an efficient tool in implementation of the Government reforms:  sociological survey of microfinance sector;  comprehensive national report on Microfinance development in Uzbekistan;  Promoting legal reforms - draft Resolution of the Cabinet of Ministers “On measures for further development of microfinance in Uzbekistan”;  Law on “Microcredits and microcredit organizations” developed and being currently considered in the Parliament

Increasing access to information: Increasing access to information:  launch of national web portal, conducting on-line forums on essential issues of MF  Development of Policy briefs - concise analytical summaries for policy decision makers, development stakeholders, donor community representatives and others Diversifying MF services: Diversifying MF services:  Piloting innovative microfinance projects with ‘Shakhrisabz’ Business Incubator, Kashkadarya region & micro-leasing project with ‘Angor’ Business Incubator, Surkhandarya region Meeting the challenges of MF development during the International Year of Microcredit, 2005

To be continued…. toward achieving poverty reduction and efficient mechanisms of financial mediation Building institutional capacity of MFIs: Building institutional capacity of MFIs:  Trainings for MFIs (Manual on MF)  Introduction of new MF services  Providing wider access to external financial resources MF as a tool toward enhancement of living standards: MF as a tool toward enhancement of living standards:  PRSP  Agriculture sector reform  Micro and small business development => Area based development in the most poor regions of Uzbekistan

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