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Strong future predicted for Uzbekistan CUs
MADISON, Wis. (8/26/10)--Uzbekistan’s fledgling credit union movement has become one of the fastest-growing in the world, and Sardor Normukhamedov, deputy director of the Central Bank of the Republic of Uzbekistan, visited the U.S. looking for ways to help increase that positive trajectory.
Click to view larger image Uzbekistan’s credit unions and banks coexist to serve the country’s population, said Sardor Normukhamedov, deputy director of the Central Bank, which regulates Uzbekistan's credit unions.
Normukhamedov developed a department to regulate the former Soviet satellite county’s credit union movement. He arrived at World Council of Credit Unions' (WOCCU) Madison, Wis., headquarters Monday with 11 Central Bank colleagues to explore best practices and other strategies to help Uzbekistan’s credit unions grow rapidly and soundly. “WOCCU is the leading organization when it comes to providing credit union development assistance worldwide,” Normukhamedov said. “When credit unions first emerged in Uzbekistan, WOCCU was there to work with the Central Bank to establish the law making credit unions possible.” WOCCU began credit union development efforts in Uzbekistan in 1998. It assisted with the policy development framework that led to guidelines governing credit union development, operations and oversight. In 2002, Uzbekistan passed its first credit union law with the assistance of WOCCU and guidance from WOCCU’s Model Law for Credit Unions publication. The country’s first three credit unions formed that same year. The Credit Union Association (CUA) of Uzbekistan was established by 11 credit unions in 2005 as the first phase of WOCCU’s development program in the Central Asian nation came to an end. CUA became a WOCCU member in 2009. Today, Uzbekistan is home to 111 credit unions that serve more than 153,000 members. The institutions hold US$140 million in assets.
Click to view larger image The Central Bank of the Republic of Uzbekistan’s delegation and hosts at World Council of Credit Unions' (WOCCU) Wisconsin headquarters this week are, from left: Muzaffar Begimqulov; guide George Palamattam, Council of International Programs; Nordirbek Rahbarov; Matt Garcia, WOCCU; Shukhrat Maksumov; Olimkhuja Tadjikhodjaev; Dave Grace, WOCCU; Vohkid Qobilov; Djasur Tulaganov; Muzaffar Abdurashitov; Alisher Sagdullaev; Gulzebo Usanova; and Sardor Normukhamedov. (Photos provided by World Council of Credit Unions)
“This is a success story for WOCCU and exactly what we like to see,” said Dave Grace, WOCCU vice president of association services. “Despite being only an eight-year-old movement, Uzbekistan’s credit unions have excellent capital, very little delinquency and an extremely strong structure. They're helping bring a solid middle-class tier to the country’s economy.” In 2009, assets held by Uzbekistan's credit unions grew 74%, placing it among the fastest-growing systems in the world. Much of their success appears to be in their ability to address the growing public demand for affordable, easily accessible financial services, Normukhamedov said. “Credit unions have become so popular because they are responding to people's needs,” the Central Bank executive said. “Credit unions have developed their own market, paying higher interest on savings and providing more immediate access to loans. Banks offer those same services, but not quite as easily.” The biggest challenges facing Uzbekistan’s credit unions are similar to those in other developing countries. Lack of credit union access to deposit insurance, the clearing and settlement system, card networks and liquidity sources will make further growth challenging, Grace said. Despite their existing strengths, the country’s credit unions will need greater liquidity for the system to expand, he added. However, access to those services may be easier to come by than in other countries. The relationship between credit unions and banks in Uzbekistan is a positive one, with each industry gaining from having a well-defined market, said Normukhamedov. “Banks and credit unions have a good relationship,” he added. “There is a healthy competition between the two markets.” The Central Bank delegation spent Tuesday visiting Westby (Wis.) Co-op CU to talk about agricultural loans, a growing need in Uzbekistan.
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