Microfinance in Uzbekistan: Market Overview and Impact Assessment Needs

Tracking the development of microfinance in Uzbekistan
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This paper provides an overview of the microfinance market in Uzbekistan. The banking and microfinance sector in the country is still immature due to the difficult operating environment and rigid regulatory framework.Several reasons such as employment generation, poverty alleviation, reduction of labor and skill migration, women'’s empowerment and social stability made microfinance an urgent and important initiative for the country. The microfinance market in Uzbekistan is characterized by:

  • Lack of legislative and regulatory framework, and taxation issues;
  • Microfinance services provided by commercial banks, savings and credit unions, NGO-MFIs and credit lines of special off-budget funds;
  • Microfinance customer profile largely consisting of women;
  • Credit and leasing services currently dominating the market;
  • Existence of large donor community.

The paper states that there is need for greater product diversification, which would promote further competition and growth of the market. Evaluation of MFIs operating in Uzbekistan using appropriate methodology should prove complementary to existing surveys, and practically benefit further development of the country's microfinance market.