Tashkent, Uzbekistan (UzDaily.com) -- Mortgage refinancing company of Uzbekistan (UzMRC) started its activity and signed its first agreement.

UzMRC is a non-bank financial institution established by the Ministry of Finance of the Republic of Uzbekistan on the basis of the decree of the President of the Republic of Uzbekistan No. PD-5715 with 25 billion soums with primary capital on 4 November 2019. Further 75 billion soums have been raised from 12 state owned and private commercial banks, that have expressed strong interest in UzMRC’s operations.

The main objectives of the UzMRC are:

- Provision of long-term financial resources to commercial banks based on market principles in order to meet the growing housing needs of the population;

- Issuance of soum denominated corporate and mortgage bonds and the development of local capital markets;

- Assistance in improving the mortgage lending system based on market principles and international standards; 

At the initial stage UzMRC is expected to raise US$150mln from the ADB to start its refinance operation. 

On the basis of separate agreements between the Ministry of Finance, ADB and UZMRC, the company will enable the commercial banks to provide affordable mortgage loans for the first time on the basis of refinance mechanism. These funds will stimulate the development of the mortgage market based on market principles and ensure the sustainability of the long-term funding for commercial banks. In turn, mortgage borrowers will have access to additional sources of affordable financing for the purchase of property in the primary and secondary markets. Significant portion of UzMRC resources will be provided to also women , in order to develop gender equality in our country.

“While the government is currently pursuing an open policy aimed at further developing the economy, the creation of an Uzbekistan’s mortgage refinancing company will lead to a new stage in the development of housing, the mortgage market and the securities market in the economy. This project provides for the allocation of funds to commercial banks in national currency, which will ensure the financial stability of commercial banks. Low-interest and long-term resources are intended for the interests of our people” said First Deputy Minister of Finance Omonullo Nasritdinkhodjaev.

"The mortgage market of Uzbekistan is at a turning point of its evolution. UzMRC has been established as one of the important drivers for the implementation of housing sector reforms announced by the President. The company provides sustainable and affordable resources to the local banking system, through borrowing of long-term financial resources in the domestic and foreign markets. In the future, the company will aim to issue corporate and eventually mortgage bonds in the local market. This, in turn, will take the development of the local capital markets to a new level. In the face of economic challenges associated with COVID-19, the company’s resources will provide much needed liquidity to the banking system and help to stimulate the economic growth” said Murodjon Farmanov, General Director of UZMRC.