Microsoft Word Microfinance development in Uzbekistan Eng doc

participants from Bolivia are actively involved in local self-governance.
Examples of MFOs activity in Uzbekistan. In 2000-2001 many farmers had problems with access to 
irrigation water as priority for water distribution was given to shirkat lands. Some MFOs started providing 
microcredits for the installation of pumps, which addressed the water supply issue and reduced risks for 
farmers.
 
Specific features of microfinance
 
Figure 1. MFOs and the poverty line (Source: CGAP, 2003) 
Commercial banks 
Credit unions 
Non-government MFO
Economic active low 
income population groups. 
Low income population 
groups. 
low 
medium 
income
level 
Poverty line 
Grants 

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The specific features of the microfinance process in Uzbekistan with closely affiliated 
categories of small business support programs, bank loans to small businesses and social 
benefits are particularly notable. 
Although microfinance is aimed towards the development of entrepreneurship, its 
distinction from support programmes for small businesses is that NGO-MFOs do not provide 
preferential loans. In the meantime NGO-MFOs differ from banks in that them extent a 
small amount of loans and that, as a rule, they do not require collateral.
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Microfinance is not a social program. It is not meant to provide social benefits to 
extremely poor population groups without a permanent source of income (e.g. the homeless 
or destitute). Its purpose is to offer a small external financial impetus in order to further 
enable those who are capable of making revenues. 
Microfinance is also distinct because of the nature of its transactions. Microfinance has 
a small scale of loans and deposits; it is orientated towards certain targeted social groups; it 
uses simple procedures for the assessment and approval of applications; it provides services 
in the area closest to the client; it offers quick loan disbursement and a strategy of 
repayment; it encourages loan repayment by offering the opportunity for subsequent larger 
loans; and it develops services targeted to the specific circumstances and needs of its 
clientele.