Tashkent, Uzbekistan (UzDaily.com) -- In order to develop the mortgage market of Uzbekistan and create a sustainable system of long-term mortgage financing based on market principles, Presidential resolution from 13 May 2019, on Additional Measures for the Development and Expansion of the Mortgage Market, was adopted lending ”, which approved the Roadmap for the development of the mortgage lending system in the Republic of Uzbekistan for 2019-2021.

As part of the reform of housing policy in the republic, the Asian Development Bank (ADB) representative office in Uzbekistan held negotiations on attracting ADB loans under the Program for Development of the Mortgage Market Sector of Uzbekistan on 8-9 October 2019 by video conference.

During the negotiations, draft loan agreements totaling US$200 million and a draft agreement between the Mortgage Refinancing Company and ADB were discussed.

The aim of the Program is to create a new institutional structure and financing mechanism to promote market mortgage financing in Uzbekistan, as well as expand the availability of mortgage housing products. These measures will allow commercial banks to gain access to long-term financing, and thereby develop market relations in the mortgage lending sector.

In order to strengthen the targeted support of socially vulnerable segments of the population, ADB is providing a loan of US$50 million to the Government of Uzbekistan to assist in the implementation of new housing subsidy mechanisms.

Also, at the expense of ADB borrowed funds in the amount of US$150 million, the creation of a new type of financial institution will be initiated - the Mortgage Refinancing Company of Uzbekistan, which will provide long-term resources in local currency to commercial banks to provide mortgage loans on market conditions.

In the medium and long term, the mortgage sector will be expanded through access to domestic capital markets through the issuance of mortgage bonds and the mobilization of long-term funds of institutional investors.

The mortgage refinancing company will also help to improve the mortgage financing system by introducing modern methods and tools of mortgage lending, as well as increasing liquidity and reducing the risks of the mortgage market participants.

As a result of the implementation of the Program, housing affordability in the primary and secondary markets will be increased by expanding mortgage loans on market conditions and introducing new products for the repair and reconstruction of residential buildings and apartments.

The negotiations were attended by representatives of the Ministry of Finance, the Central Bank, the Ministry of Economy and Industry, the Ministry of Investment and Foreign Trade, the Ministry of Justice, the Ministry of Construction, the Agency for the Development of the Capital Market, the State Committee for Statistics, the State Committee for Geodecadastra and the Antimonopoly Committee.