Microsoft Word Microfinance development in Uzbekistan Eng doc

Assessment of MFO clientele base among entrepreneurs without the status of legal entity. 
Individual entrepreneurs correspond more to the classical MFO target group. Moreover, these 
types of entrepreneurs are more socially oriented and they adapt more easily to the challenges 
of the current economic situation. The individual enterprise sector provides employment to 
the most socially vulnerable groups of society.
Nationwide growth in the number of small businesses is supported by buoyant growth 
of the number of entrepreneurs without the status of legal entity who represent the most 
dynamic type of entrepreneurs.
According to 2004 results, 4,689,300 individual entrepreneurs were active in 
Uzbekistan. According to polls, individual entrepreneurs are concentrated mainly in 
commerce and the production of non-foodstuff goods. After adjusting for those who do not 
need external financing (38.3% in this group, according to polls), the clientele size of MFOs 
in the individual entrepreneurship sector amounts to 2,893,400.
Only 62.5% of this number (according to polls) can constitute MFO clientele. In other 
terms, the real size of MFOs’ clientele base in terms of entrepreneurs without the status of 
legal entity is 1,808,400.
Dekhkans and private farms 
Private farms. Analysis of demand for financial services by private farms shows that they 
opt for preferential bank loans, and thus they should not be included into the potential 
clientele base of MFOs. Thus, the average amount of loans issued by Pakhtabank to cotton 
growing private farms makes up about 4.8 million soums - much higher than maximum 
threshold for microfinancing provided by microfinancing organizations, which is equivalent 
to USD 3,000.
The average amount of microloans issued by commercial banks as a whole (including 
private farms) in favorable conditions is about 2.6 million soums. This figure significantly 
exceeds the average amount of microloans provided by MFOs which is 146 US Dollars.
Thus, demand for microfinancing services by private farms will not constitute a 
significant portion of demand on MFOs as the demand will be directed towards preferential 
loans provided by commercial banks.
Dekhkan farms. Dekhkan and family-run farms are a clientele base for MFOs. According to 
legislation, they are may work with and without the establishment of a legal entity. Hiring 
permanent staff however is not permitted for dekhkan farmers without status of legal entity.
Currently there are 4,500 thousand farmers registered in both categories in Uzbekistan. 
But not all the dekhkan farms will become MFOs clients. First, according to polls, 
18.3% do not need external financing at all, and only 26.7% of the rest became MFO clients.
Taking into account these adjustments, the real size of the clientele base of MFOs with 
respect to dekhkan farms will constitute 981,600.