Microsoft Word Microfinance development in Uzbekistan Eng doc

 
 4.4. Maximum loan amount and interest policy 
Maximum loan amount. There is a significant difference of opinions on maximum loan 
amounts ranging from $1,000 to $5,000 and more. To set the maximum loan amount equal 
to $3,000 is expedient due to a number of reasons: 
• Ensure the continuity and sustainability of laws.
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• According to the definition of microcredit given in “Microfinancing Banks and their 
Activities” Bulletin, the loan amount must not exceed 250% of per capita GNP in the 
country.
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• The average microloan amount is circa $140-150 at present. At the same time polls indicate 
that half of MFO clients would like to borrow in the amount $500 and more, and one fifth 
of entrepreneurs need $1,200-3,000 loans. (Table 13, Annex 1 to the report).
• This size loan allows the borrower to earn profits sufficient to satisfy needs and to reinvest 
even if the currently high interest rates (4-7% monthly) are maintained. 
• This price segment is not covered by any financial establishment of the country. 
• Consider of best innovative microfinancing practices. For instance, the maximum 
microcredit amount of Grameen Bank in Bangladesh is $100-300, in Ethiopia it is up to 
$673, in Morocco - $5,300, in Nepal – up to $1,000, in Pakistan - $150, in Poland and 
Hungary - $3,500, in Kazakhstan - $3,000. In a number of West African counties (Benin, 
Burkina Faso, Cote d’Ivoire, Mali, Niger, Senegal, Togo, Guinea-Bissau) the maximum 
microloan amount is $17. The average loan amount throughout Eastern Europe, Central 
Asia, and Caucasus is $1,209. 
Setting a maximum amount for microleasing at the level of $10,000 is reasonable due to 
an array of arguments: 
• Existing, although not extensive, experience supports this. Although the average amount of 
leasing transactions does not exceed $2000, there are instances when the maximum value 
of property leased was up to $10,000 (Panel 3). 
• This level corresponds to the average value of domestically produced equipment although 
it is much lower than that of imported equipment.
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This amount is specified in the basic resolution № 309. 
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According to the World Bank data in 2000-2003 this indicator decreased from $630 to $420. The same 
indicator calculated with consideration of purchasing power parity (PPP) changed from $1,490 to $1,740. 

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