Microsoft Word Microfinance development in Uzbekistan Eng doc

 
New pilot projects 
Two types of new pilot projects will strengthen the status of microfinancing in 
Uzbekistan: pilot testing of new microfinance products and the introduction of traditional 
microfinance products in areas with the most difficult job market situation. 
The introduction of microinsurance schemes may become one of the former pilot 
project types. Analysis shows that, due to their size, microcredits are highly apt for 
microinsurance purposes and many MFOs are interested in providing these services to their 
clients but are not able to implement it within the framework of current legislation. Pilot 
projects of this type can be implemented within the framework of regional development 
strategies currently in the works. Furthermore, regions covered by these strategies, except for 
Bukhara and Khoresm regions, initially served as a foundation for the introduction of 
microfinancing by international organizations and donors. It means that the established 
microcrediting base is sufficient for the approbation of corresponding microinsurance 
schemes.
As a basis for the second type of pilot projects, estimates of the Ministry of Labor and 
Social Welfare’s 2005-2006 forecasted parameters may be used in 51 areas of the country 
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Due to the high birth rate and demographic burst of the 1970-80s, the labor market of Uzbekistan annually 
increases by about 0.8 million people while not more than 0.12 million people leave it. Youth from the 
countryside constitute about 400-500 thousand people in the overall growth in the labor market. 

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which exhibit difficult job markets situation. The introduction of pre-tested microcrediting 
schemes will be carried out much faster here and will have a rapid social effect. 
Prospects of donor support to MFOs 
Donor organizations can provide long-term assistance and resources required for the 
establishment of organizations capable to work without donor support. They can also offer 
and exit strategy. Increases in efficiency and stability of MFOs can be achieved through: 
• Technical assistance; 
• Improvement of legislative and regulatory framework of microfinance process; 
• Facilitating the regulation of microfinance from the perspective of its integration 
into the wider financial sector
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; 
• Development of reporting standards, transparency, and performance indicators in 
the developing industry; 
• Improvement of professional skills of MFO staff on risk evaluation, accounting, 
financial management, internal control, auditing and reporting; 
• Improvement of professional skills of MFO management in monitoring and 
financial liability; 
• Facilitate MFO innovations for broader coverage of poor population groups 
• Assistance in transformation of NGO-MFOs into sustainable organizations. They 
could start with the transformation of advanced NGO-MFOs into deposit-accepting 
and regulated MFOs such as microfinance banks; 
• Financing establishments of small start-up innovative venture enterprises; 
• Investment into more labour-intensive business related to the broader MFO 
capacity.