On 23 October 2007, United Nations Development Program (UNDP) and Mikrokreditbank signed Cooperation Agreement. The Cooperation Agreement was signed within the framework of Area-Based Development Programme initiated by UNDP with an aim to foster socio-economic development in the rural areas of Uzbekistan.
Mikrokreditbank was selected as a result of open competition launched by UNDP among financial and credit organizations as a partner for introduction products in target communities in Tashkent region. The microcredit products are targeted at increasing production of vegetables in greenhouses, fattening cattle and increasing the value of vinery crop. The products were developed within the framework of the microfinance component of the Area-Based Development Program based on the previously conducted assessment of entrepreneurs’ and farming entities’ needs in microfinance services. The needs assessment was conducted in 2006 in two citizens’ rural assemblies namely Zarkent (Parkent district) and Yonaryk (Kibray district). Till the end of March 2008 Mikrokreditbank will provide over 50 credits.
The key feature of cooperation between UNDP and Mikrokreditbank within Area-Based Development Program lies in targeted approach in identifying the users of microcredit products designed based on specific area and economic activity features. This approach allows improving financial sustainability of economic entities thus ensuring credit repayment.
Area-Based Development Program was initiated in Uzbekistan in 2006 in Kashkadarya and Tashkent regions. The overall goal of the Program is to contribute to improvement of living standards of population in rural areas through establishment of reciprocal cooperation and partnership mechanisms among communities, local governments, educational and research institutions, NGOs and private sector with an aim to increase efficiency and generate new incomes and employment opportunities for sustainable human and economic development.
Area-Based Development microfinance component covers piloting and development of a wide range of microfianance services beyond credits for short-term working capital for small traders. The component aims at contributing to improve access to microfinance services in rural areas for private and dehkan farmers, entrepreneurs and low-income households.