Project Data Sheet

Project Data Sheets (PDS) contain summary information on the project or program: Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

PDS Creation Date 16 Feb 2007
PDS Updated as of 21 Oct 2013

Project Name Small and Microfinance Development Project
Country Uzbekistan
Project/Program Number 33196-013
Status Approved
Geographical Location To be determined
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
Sector Finance
Subsector Microfinance
Strategic Agendas
Drivers of Change
Gender Mainstreaming Categories

Financing

Type/Modality of Assistance Approval Number Source of Funding Approved Amount (thousand)
Loan1963Ordinary capital resources20,000
Counterpart 22,447
TOTAL US$ 42,447

Safeguard Categories

For more information about the safeguard categories, please see http://www.adb.org/site/safeguards/safeguard-categories

Environment C

Summary of Environmental and Social Issues

Environmental Aspects
No significant impact is expected.
Involuntary Resettlement
No
Indigenous Peoples
No

Stakeholder Communication, Participation and Consultation

During Project Design
During Project Implementation

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.

Development 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.

Project Outcome

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 Towards 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.

Outputs and Implementation Progress

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.
Status of Development Objectives
Material Changes

Business Opportunities

Date of First Listing
Consulting Services
Procurement
Procurement and Consulting Notices
http://www.adb.org/projects/33196-013/business-opportunities

Timetable

Concept Clearance
Fact-finding 16 Apr 2002 to 30 Apr 2002
Management Review Meeting 22 Jul 2002
Approval 09 Dec 2002
Last Review Mission

Milestones

Approval No. Approval Signing Effectivity Closing
Original Revised Actual
Loan 1963 09 Dec 2002 25 Sep 2003 20 Jul 2004 31 Dec 2010 31 May 2011

Utilization

Date Approval Number ADB (US$ thousand) Others (US$ thousand) Net Percentage
Cumulative Contract Awards
28 Aug 2014 Loan 1963 462 0 30.00%
Cumulative Disbursements
28 Aug 2014 Loan 1963 1,565 0 100.00%

Status of Covenants

Covenants are categorized under the following categories—audited accounts, safeguards, social, sector, financial, economic, and others. Covenant compliance is rated by category by applying the following criteria: (i) Satisfactory—all covenants in the category are being complied with, with a maximum of one exception allowed, (ii) Partly Satisfactory—a maximum of two covenants in the category are not being complied with, (iii) Unsatisfactory—three or more covenants in the category are not being complied with. As per the 2011 Public Communications Policy, covenant compliance ratings for Project Financial Statements apply only to projects whose invitation for negotiation falls after 2 April 2012.

Approval No. Category
Sector Social Financial Economic Others Safeguards Project Financial Statements
Loan 1963 Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory

Contacts and Update Details

Responsible ADB Officer R. Narasimham (rnarasimham@adb.org)
Responsible ADB Department Central and West Asia Department
Responsible ADB Divisions Uzbekistan Resident Mission
Executing Agencies Ipak Yuli Bank
*

Ipak Yuli Bank
R. Rakhimbekov

Financial Sector Development Agency (FSDA)
Zafar A. Umarov

Asaka Bank
K. Oripov

Financial Sector Development Agency (FSDA)
*

Pakhta Bank
A. Boymuratov

Links

Project Website http://www.adb.org/projects/33196-013/main
List of Project Documents http://www.adb.org/projects/33196-013/documents