Microfinance - an important factor in the development of regions of the country

June 07, 2010

President of Uzbekistan Islam Karimov, in his address «Modernization of the country and building a strong civil society is our main priority» at the Joint Session of the Legislative Chamber and Senate of Oliy Majlis of the Republic of Uzbekistan on 27 January 2010, underlined that the major task of the Parliament, local representative bodies - Kengashes - is to carry out a strict parliamentary, deputy's monitor on how the executive branch, central government and khokimiyats at the local level execute the laws passed by Parliament.

At the Session of the Cabinet of Ministers of the Republic of Uzbekistan on 29 January 2010, dedicated to the results of the social and economic development of the country in 2009 and the most important priorities of the 2010 economic program, head of state highlighted the need to continue to enhance the role of commercial banks in financing the development of small businesses, private entrepreneurs and farmers. In this regard, in 2010 the target is to allocate no less than 2.5 trillion UzSum of credit to small business enterprises and private entrepreneurs, while the volume of micro-credits is to be increased up to 420 billion UzSums.

In order to effectively carry out these tasks, a joint meeting of the Committee on budget and economic reforms of the Senate of Oliy Majlis of the Republic of Uzbekistan and the Council of deputies of the Djizak region was held in the Khokimiyat of Djizak region, dedicated to the results of studying the implementation of the Law of the Republic of Uzbekistan «On microfinancing».

There were discussed the issues of implementation of this Law in Djizak region in 2007 - 2009 years and the first quarter of 2010, as well as the further development of microfinance services of credit organizations in this region. Special attention was paid to the participation of deputies of the region in qualitative execution of this law.

Law of the Republic of Uzbekistan «On microfinancing» is a necessary legal basis for the development of microfinance services as the most important factor for successful implementation of Anti-crisis program and post-crisis development, financial support of subjects of small business and private entrepreneurs.

Currently 39 branches of commercial banks, as well as two non-banking credit organizations operate in Djizak region. The volume of microfinance services rendered by them in 2009, amounted to 14,3 billion UzSums, that is 1,5 times more than in 2008. As a result of providing these services to the subjects of small business and private entrepreneurs, 5233, 6152 and 16637 jobs were created in the region respectively in 2007, 2008 and 2009, as well as 2871 jobs for the first quarter of 2010.

However, senators and deputies noted that the work in this area requires further development and promotion, first-priority attention to the implementation of procedural rules and mechanisms of law and by-laws. Also they underlined the necessity for the public authorities in the field to take practical measures for further development of microfinance, especially in rural areas is an efficient and effective factor in the organization of jobs, expansion of production and service sectors, as well as enhancing the investment activity of small businesses and private entrepreneur ship.

During the discussion it was suggested to further expand the provision of micro leasing services, especially in rural areas, is an incentive and an effective form of modernization, technical and technological renovation of production projects on the use of local raw materials and development of energy saving and waste-free production, reduce cycle times. The share of micro leasing services in the structure of microfmance services on a number of banks over the period considered is low. There is a need for a significant increase in the level of cooperation and interaction of representative government, khokimiyats and other stakeholders with commercial banks, especially in the implementation of territorial programs of socio-economic development. As noted at the meeting, little remains on the market share of leasing services and engineering companies, not enough development on the development of innovative technologies.

Senators and deputies noted that for the full and effective implementation of the requirements of the Law of the Republic of Uzbekistan "On microfinancing", khokimiyats and other bodies of local executive authorities should assist to small businesses and private entrepreneurs, who have received microfmance facilities, on efficient use of production capacity and market infrastructure. Participants of the joint meeting also made suggestions to improve the explanatory works of microfmance to the public and business structures by the deputies, employees of the banking and non-banking systems, leasing, insurance and engineering companies and other interested parties.

Following discussion, a joint decision was taken.

The joint meeting was attended by senators, deputies of the regional, district and city Councils of deputies Djizak region, representatives of the Central Bank and other concerned ministries and agencies of Uzbekistan, commercial banks and non-banking credit institutions, leasing, insurance and engineering companies, scientists and experts, as well as representatives of the media.
 

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