Microsoft Word Microfinance development in Uzbekistan Eng doc

Low income population groups. Demand for microfinancing services may also come from 
persons with such a low income that it is inadequate for a decent lifestyle. According to 
Ministry of Labor and Social Welfare data, in early 2005 there were 1,661,000 households 
receiving benefits as poor families in Uzbekistan. Furthermore, 254,000 households are 
receiving financial aid. Thus, the number of households living below poverty line in 
Uzbekistan is estimated at 1,915,000. 
Labor migration. From a methodological point of view, this category must also be included 
into any calculation of MFOs’ client base because a portion of labor migrants would stay in 
the country and attempt to launch their own small business if they had better access to 
financial resources.
According to Tong NGO data, average annual labor migration in Uzbekistan in 2002-
2004 reached about 1 million people. The mean migrant age was 35. Unlike migration 
processes in more developed countries where migrants have higher education and significant 
work experience, the migration contingency in Uzbekistan is represented by poor groups. 
The gap between average per capita income in Uzbekistan and the neighboring states of 
Kazakhstan and Russia constantly feeds labor migration flows from Uzbekistan. One 
particularly important aspect here is the fact that the aforementioned gap in average per 
capita income is increasing. While 3-4 years ago it was 30-40%, it is now several fold. This 
very gap along with a group of factors hindering the development of small businesses 
supports a persistent outflow of labor migrants from Uzbekistan to neighboring countries and 
Russia. 
But not all migrants possess the aptitude to become entrepreneurs. In this respect, not 
all of them are potential clients for MFOs. Applying the same methodological approach used 
to calculate the potential scale of clients among the unemployed, 48% or 480,000 migrants 
might launch their own business in favorable circumstances and produce demand for 
microfinancing services.