ADB: Microfinance Institutions Tajikistan

The report states that Tajikistan’s microfinance sector emerged in 1999–2000s through UNDP and international NGO programmes (Mercy Corps, ACDI/VOCA, CARE, ACTED), which later spun off into IMON, Arvand (formerly Microinvest), Humo, and Oxus, alongside FINCA. In 2004, Parliament enacted the first microfinance law creating three types of institutions — micro loan foundations, micro loan organisations, and micro deposit organisations — regulated by the National Bank of Tajikistan. The report states that from 2005 to 2012 the number of licensed MFIs grew from 21 to 124, aggregate gross loan portfolios rose from $9 million to $190 million, and borrowers exceeded 127,000. The 2009 financial crisis caused loan demand to fall by roughly 9%, portfolio-at-risk (>30 days) to reach around 10%, and the somoni to depreciate by 27%. The report states that trade-oriented lending fell from about 50% to one-third of portfolios, while consumer loans rose from zero to nearly one-sixth. Women represented 39% of clients and received 32% of disbursements. Six MFIs based in Dushanbe or Khujand controlled over 80% of the market, with IMON leading at 35–40%. The report states that challenges include currency-denominated foreign funding, limited deposit-taking due to historical distrust of banks, an unfavourable investment climate, and the need to avoid overlending crises seen in Bosnia and India.