The Government of Uzbekistan hasrequested the World Bank to provide observations andrecommendations for development of the microfinance marketin Uzbekistan. This includes credit unions and microfinanceorganizations (MFOs), and touches on ‘consumer lending’ orsmall loans originated by commercial banks. For purposes ofthis Policy Note, the discussion focuses on issuespertaining to the non-bank institutions active inmicrofinance, as well as those that relate to the banks’existing efforts in this segment of the market. There is noparticular focus on other groups, such as micro-leasing,micro-savings, micro-insurance, or agricultural creditcooperatives that are often included in separate categories,because they either are not active in Uzbekistan or data arenot available for them. Current legislation envisions someof these activities unfolding, namely micro-leasing andmicro-insurance. However, as of late 2006, early 2007, thesewere not included as part of the assessment. This policynote on microfinance does not address larger issuesregarding the macro-economy or banking sector, as thisdiscussion falls outside the scope of understanding betweenthe Government of Uzbekistan (henceforth GoU) and the Bank.At the same time, there are references to some of the keymacro and structural issues that impact developments inmicrofinance, namely inflation and interest rates at themacro level, and the incentive framework for banks andnon-banks specific to microfinance.
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