Uzbekistan: Mortgage Market Sector Development Program (Additional Financing)

Sovereign Project | 51348-005

The Asian Development Bank (ADB) approved the Mortgage Market Sector Development Program on 28 November 2019._It was designed to increase the availability of affordable market-based residential mortgage credit by establishing the premise for improved access to long-term market-based funding and enhanced development of competitive housing finance products, as well as reforming the inefficient housing subsidy framework and some of its programs. The program's impact is living standards improved for the population of Uzbekistan. The program has three outputs. The additional financing will expand the scope of output 3 to include supplementary long-term funding to the Mortgage Refinancing Company of Uzbekistan (UzMRC) to make long-term local currency resources available to identified eligible participating financial institutions (PFIs) to fund (i) residential mortgage loans, (ii) housing improvement loans, and (iii) green renovation loans (a new loan product).

Project Details

  • Project Officer
    Shah, Syed Ali-Mumtaz H.
    Central and West Asia Department
    Request for information
  • Approval Date
    7 November 2022
  • Country/Economy
    Uzbekistan
  • Sector
    • Finance
Project Name Mortgage Market Sector Development Program (Additional Financing)
Project Number 51348-005
Country / Economy Uzbekistan
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 4245-UZB: Mortgage Market Sector Development Program (Additional Financing)
Ordinary capital resources US$ 150.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Sector / Subsector

Finance / Housing finance

Gender Equity and Mainstreaming Effective gender mainstreaming
Description The Asian Development Bank (ADB) approved the Mortgage Market Sector Development Program on 28 November 2019._It was designed to increase the availability of affordable market-based residential mortgage credit by establishing the premise for improved access to long-term market-based funding and enhanced development of competitive housing finance products, as well as reforming the inefficient housing subsidy framework and some of its programs. The program's impact is living standards improved for the population of Uzbekistan. The program has three outputs. The additional financing will expand the scope of output 3 to include supplementary long-term funding to the Mortgage Refinancing Company of Uzbekistan (UzMRC) to make long-term local currency resources available to identified eligible participating financial institutions (PFIs) to fund (i) residential mortgage loans, (ii) housing improvement loans, and (iii) green renovation loans (a new loan product). Further improvements are also supported, including the establishment of an information and technology system in UzMRC, enhanced gender access to UzMRC funding, the operationalization of the green renovation loan tool kit, and UzMRC's adoption of a strategic business plan.
Project Rationale and Linkage to Country/Regional Strategy Given the good progress under output 3, the government requested ADB support to scale up the FIL component of the program - bringing significant improvements by providing additional long-term funding for UzMRC to make long-term local currency resources available to identified and eligible PFIs. The additional financing is consistent with the government's National Development Strategy, 2022-2026_and ADB's country partnership strategy for Uzbekistan, 2019-2023,_which supports inclusive and sustainable economic growth through financial market development, access to finance, private sector development, and domestic resource mobilization. The additional financing supports key operational priorities of ADB's Strategy 2030 such as addressing remaining poverty and reducing inequalities through broader access to housing finance, which will contribute to improving living standards, gender equality, and women's empowerment through women's enhanced access to mortgage loans; tackling climate change through enhancing environmental sustainability by introducing a green renovation loan product; and strengthening the governance and institutional capacity of UzMRC.
Impact

Living standards improved for the population of Uzbekistan

Project Outcome
Description of Outcome

Availability of affordable market-based residential mortgage credit increased

Progress Toward Outcome In May 2021, the functions of HAU have been shifted to the Ministry of Economic Development and Poverty Reduction who will be responsible for developing housing policy of Uzbekistan.
Implementation Progress
Description of Project Outputs

Policy, regulatory, and legal framework for the mortgage finance industry strengthened (under the policy-based loan)

Housing finance strategy and subsidy framework strengthened (under policy-based loan)

The establishment and operationalization of the mortgage refinancing company supported with long-term funding (under the financial intermediation loan)

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Nation-wide
Safeguard Categories
Environment FI-C
Involuntary Resettlement FI-C
Indigenous Peoples FI-C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Responsible ADB Officer Shah, Syed Ali-Mumtaz H.
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, CWRD
Executing Agencies
Ministry of Finance
Timetable
Concept Clearance -
Fact Finding 07 Jun 2022 to 22 Jun 2022
MRM 09 Aug 2022
Approval 07 Nov 2022
Last Review Mission -
Last PDS Update 07 Nov 2022

Loan 4245-UZB

Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 150.00 Cumulative Contract Awards
ADB 150.00 - 0.00 0.00 %
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 - 0.00 0.00 %

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