Microsoft Word Microfinance development in Uzbekistan Eng doc

Panel 6. Statutory acts regulating CU activities 
1. 
Rules for financial transactions of credit unions
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, related to forming capital, crediting, raising 
funds in the form of credits and deposits as well as investing available funds in order to minimize the risks 
arising from credit union activities. 
In accordance with the Rules to ensure sustainable functioning of CUs, the total amount of capital must 
be no less than 15 percent of a credit union’s assets. A CU is entitled to provide loans only to its members.
The amount of a loan provided to one borrower or group of mutually related borrowers may not exceed 25 
percent of the credit union’s capital. The total amount of a trust-based loan issued to one borrower may not 
exceed 10 percent of the CU’s capital.
A CU may raise funds though savings or fixed-term deposits based on the deposit agreements between 
the CU and its members.
The rules envisage the observance of the coefficient of current liquidity estimated as the ratio of liquid 
assets and deposits with a repayment period of up to 30 days to the amount of liabilities without fixed term and 
period of execution up to 30 days. The figure for the coefficient of current liquidity should be no less than 20 
percent. 
2. 
Rules for the approval of the minimum amount of Authorized capital, the amount of the 
registration fee, the qualification requirements for the chief executive officer, forms and procedures for 
registration, the issuance of a license for credit union activities, and the certificate form for payment for 
share contributions by members of credit unions
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. 
The minimum amount of CU authorized capital is set at: 
• 
Equivalent to USD 20,000 for credit unions created in the city of Tashkent; 
• 
Equivalent to USD 10, 000 for credit unions created in other residence areas. 
The CU is charged a fee for state registration in the amount of 0.1% of the minimum amount of the 
authorized capital of CU. Qualification requirements for the head of the CU‘s executive body include higher 
education, no less than 3 years work experience in the financial sector, and a flawless business reputation. 
3. Guidelines for the accounting practices of credit unions
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determine the rules for accounting 
practices and reporting: recordkeeping and control over financial transactions; the structure of the accounting 
office; modes of servicing CU members; methods of document turnover; and volumes and procedures for 
accounting statements based on international standards.
Given all of the existing limitations to CU’s, their rapid development in 2004 
demonstrates that the legislative and regulatory framework for CUs was progressively 
encouraging. 
The further development of legislative and regulatory framework for microfinance is 
expected to proceed in two stages: 
1. The adoption of the Resolution of the Cabinet of Ministers with the objectives to 
regulate the most pressing current issues faced by MFOs: clear registration procedure 
of various types of MFOs, provision of MFO access to alternative financial sources 
and a regime for further taxation. 
2. Development of the Law “On microfinance in the Republic of Uzbekistan” with an 
objective to regulate the entire spectrum of issues related to the MFO activities in 
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Approved by the Resolution # 21 A/2 of the Board of the Central Bank on September 14, 2002 and registered 
at the Ministry of Justice under # 1179 on 14 September, 2002. 
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Registered by the Ministry of Justice under # 1151 on 21 June, 2002. 
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Registered by the Ministry of Justice under # 1228 on 27 March, 2003. 

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Uzbekistan. Adoption of this law will have a positive effect upon the microfinance 
sector in that it will form an optimal legal framework.