Microsoft Word Microfinance development in Uzbekistan Eng doc

Leasing transactions 
In August 2002 Presidential Decree “On actions for further encouragement of leasing 
activities” was issued, which removed the tax barriers hindering the development of the 
leasing sector and offered the same terms of taxation along with other financing schemes, 
particularly bank loans. In 2002-2003 Parliament adopted more than 40 amendments to the 
Civil Code, Tax Code, Economic Procedural Codes, and laws “On leasing” and “Customs 
tariffs”. This has led to the creation of a progressive legislative atmosphere which 
encourages the development of this type of financing.
Thanks to these efforts, new players
12
emerged in the market, lowering 
Uzselkhozmashleasing’s share. While it amounted to 93% in 2001 and 84% in 2002, it stood 
12
Up to 2002, 13 lessors were undertaking lease deals, as of end 2004 their number reached 28: 15 commercial 
banks, 11 leasing companies and 2 MFOs. 

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at 64% in 2004
13
. Two MFOs appeared among the new market players: the Karakalpak 
Republican Business Incubator and the Association of Business Women of Karakalpakistan, 
who provide microleasing services in the framework of an ADB pilot project entitled 
“Innovative methods of poverty reduction in Karakalpakistan”.
The maximum lease amount in the framework of the ADB project is USD 10,000. But 
in practice, the scale of the projects significantly varies. As of May 29, 2005, 52 KRBI 
projects worth a total of USD 160,000 and 56 BWAU projects worth a total of USD 110,000 
were disbursed.
Panel 3. Indicators of MFO leasing deals in the framework of ADB pilot project
 
BWAK KRBI 
Indicators 
2003 2004 2003 2004 
Number of lease agreements per annum
27 
26 
31 
16 
Total amount of the leasing agreements made per annum (at 
the cost of property bought for leasing ) thousands of USD 
55,0 55,1 
55,2 83,1 
Total cost of the property turned over for leasing per annum, 
thousands of USD
47,4 55,1 
55,3 83,1 
Number of leasing deals in the portfolio at the year end 
(number of active lease agreements ) 
25 51 
31 47 
Leasing portfolio (remaining amount of principal by the 
active lease agreements) as of year end, thousands of USD 
48,0 96,3 
54,7 132,2 
Cost of property turned over for leasing in accordance with 
credit policy, thousands of USD 
-minimum 
- - 
- - 
- 
maximum 
10,0 10,0 10,0 10,0 
Minimum cost for property leased, thousands of USD 0,7 
0,6 
0,2 
0,7 
Maximum cost for property leased, thousands of USD 
8,6 9,6 10,0 9,7 
Average amount of lease agreement (based on the cost of 
property leased) thousands of USD 
1,9 2,1 1,8 5,2 
Lease period for the property specified by the lesser 
(according to the credit policy)
3 years 
3 years 
3 years 
3 years 
Average term for lease agreements made
3 years 
3 years 
3 years 
3 years