|Project Name||Small and Microfinance Development Project|
|Project Type / Modality of Assistance||Loan
|Source of Funding / Amount||
|Strategic Agendas||Inclusive economic growth
|Drivers of Change||Private sector development
|Sector / Subsector||Finance
- Inclusive finance
|Gender Equity and Mainstreaming||Gender equity|
|Description||The overall goal of the small and microfinance development facility (SMDF) is to create a viable and sustainable institutional framework and mechanism for effective delivery of financial services particularly to the poor, low-income households and small and micro enterprises. To support the large small and microfinance (SMF) requirements of the country, the SMDF advocates the development of a broad and sustainable delivery mechanism for the SMF. The Project has four major elements: (i) development of an enabling policy, legal and regulatory cum supervisory framework for savings and credit unions (SCUs); (ii) promotion of the establishment of an institutionally and financially sustainable network of a minimum of 20 SCUs in accordance with the Law on Credit Unions supervised and regulated prudentially by the Central Bank of Uzbekistan (CBU); (iii) development of institutional capacities of the designated commercial banks to effectively mobilize deposits from and intermediate to households, and micro and small enterprises; and (iv) institutional capacity building both at the banks and SCUs for SMF delivery capacities. These four elements reinforce each other and are designed to develop an effective and well-funded financial system which mobilizes savings and provides poor with financial support to set up opportunities for income generation. The Project is critical to support Uzbekistan's transition and poverty reduction efforts.|
|Project Rationale and Linkage to Country/Regional Strategy||
An effective and well-funded rural financial system, which mobilizes savings and provides poor with financial support to set up opportunities for incoming generation, are critical to support Uzbekistan's transition and reduce proverty. ADB, along with other MDBs, has been looking at developing a more holistic approach to improve the access outreach and delivery of small and microfinance services to the population and especially the poor. This encompasses the simultaneous pursuit of alternative microfinance delivery mechanisms. These include the (i) creation of new institutions with adequate capacities to improve rural and microfinancial intermediation; and (ii) development of some banks that have better outreach to intermediate larger flows of small loans.
Project is linked to CSP and is highly relavant.
|Impact||Creation of a viable and sustainable institutional framework and mechanism for effective delivery of financial services, particularly to the poor, low income households , and small and microenterprises.|
|Description of Outcome||
(i) Development of an effective legal, regulatory, and institutional framework for SCUs;
(ii) Establishment of financially sustainable network of at least 20 SCUs that would serve to provide a role model for further growth of SCU sector;
(iii) Improving commercial banks' financial intermediation and access to poor individuals, households, microenterprises, and SCUs.
|Progress Toward Outcome||Progress in developing an effective regulatory and institutional framework has been satisfactory. As a result appraisal estimates in terms of number of credit unions has already been exceeded significantly. Membership is growing and geographic coverage is expanding. Credit unions show sustainable growth in assets, capital, savings and loans. Credit line to PCBs contributed to improving of financial intermediation to micro and small enterprises, especially in rural areas.|
|Description of Project Outputs||
Establish an SCU network that is financially sound and institutionally sustainable, meeting the measurable prudential standards stated in the next column.
Expand outreach to and beyond oblast capital, supplying remunerative financial services that meet effective demand from field membership.
Establish enabling legal and regulatory framework for SCU operations.
Establish prudential supervision and regulation infrastructure for SCUs.
Enhance capacity of the FSDA to provide training and institutional capacity building to nascent SCUs.
Selection of Pakhta and Asaka Bank and other commercial banks that are operationally and financially sound
|Status of Implementation Progress (Outputs, Activities, and Issues)||
By the end of 2010 the total number of SCUs reached 116 with total membership of 212,000. Around 41% of members were women. The total assets were equal to $201 million, loans outstanding $175 million and savings $ 139 million.
Project significantly exceeded targets set for SCU development.
About 50% of SCUs are outside Tashkent. The SCUs serve the low end of SME market where banks are not present.
As of 31 Dec 2009 the total number of SCUs reached 103 with total membership of 153,063. The total assets were equal to $140.3 million, loans outstanding $121 million and savings $ 100.1 million.
As of 31 Dec 2008 there were 78 SCUs in Uzbekistan with total assets of US$ 80 million.
As of 31 December 2007 there were 55 SCUs operating in Uzbekistan with nearly 67,000 members in 11 regions of Uzbekistan. Total assets of SCUs reached $37.5 million with loans outstanding of $33.3 million.
As of 30 June 2007 there were 44 SCUs operating in Uzbekistan with nearly 59,000 members in 10 regions of Uzbekistan. The regulatory framework is regularly reviewed and necessary amendments introduced. Some amendments were made to the "Law on Credit Unions" in April of 2006. In addition, laws on microfinancing and microcredit institutions were adopted by the Parliament in August and September of 2006. FSDA in cooperation with other organizations developed training programs, which are contributing to improvement in SCUs' performance.
During 2006-2010 Asaka Bank and Agro bank (former Pakhta Bank) and Ipak Yuli provided financial intermediation to microenterprises and individuals. Credit Line was fully utilized.
|Geographical Location||To be determined|
|Summary of Environmental and Social Aspects|
|Environmental Aspects||No significant impact is expected.|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design|
|During Project Implementation|
|Responsible ADB Officer||Bobir Gafurov|
|Responsible ADB Department||Central and West Asia Department|
|Responsible ADB Division||Uzbekistan Resident Mission|
Asaka BankK. Oripov67, Nukus Str., 100015, Tashkent, Uzbekistan
Financial Sector Development Agency (FSDA)email@example.com Uzbekistan Ave., Tashkent, Uzbekistan
Ipak Yuli BankR. RakhimbekovINFO@IPAKYULIBANK.COM2 Abdulla Qodiriy Street, Tashkent, 100017, Uzbekistan
Pakhta BankA. Boymuratov43, Muqimiy Str., Tashkent, 100096, Uzbekitan
Financial Sector Development Agency (FSDA)Zafar A. Umarovfsda@ars.uzUzbekistan Ave., Tashkent, Uzbekistan
Ipak Yuli Bank12 a, Farkhadskaya Street
|Concept Clearance||08 Mar 2002|
|Fact Finding||16 Apr 2002 to 30 Apr 2002|
|MRM||22 Jul 2002|
|Approval||09 Dec 2002|
|Last Review Mission||-|
|PDS Creation Date||16 Feb 2007|
|Last PDS Update||12 Apr 2011|
|Approval||Signing Date||Effectivity Date||Closing|
|09 Dec 2002||25 Sep 2003||20 Jul 2004||31 Dec 2010||-||31 May 2011|
|Financing Plan||Loan Utilization|
|Total (Amount in US$ million)||Date||ADB||Others||Net Percentage|
|Project Cost||42.45||Cumulative Contract Awards|
|ADB||20.00||09 Dec 2002||16.90||0.00||100%|
|Cofinancing||0.00||09 Dec 2002||16.90||0.00||100%|
|Status of Covenants|
|Approval||Signing Date||Effectivity Date||Closing|
|09 Dec 2002||13 Feb 2003||13 Feb 2003||28 Feb 2004||31 Jan 2005||-|
|Financing Plan/TA Utilization||Cumulative Disbursements|
|400,000.00||0.00||120,000.00||0.00||0.00||0.00||520,000.00||09 Dec 2002||399,999.42|
|Status of Covenants|