On the Law of the Republic of Uzbekistan on microfinancing

Draft of the Law was adopted by Legislative Chamber o­n June 21, 2006 and sent to the Senate o­n June 30, 2006. The Law was approved by the Senate o­n August 25, 2006 and signed by President o­n September 15, 2006. The Law consists of 25 articles.

Main goal of the Law is to regulate the relations in the sphere of development of the market of microfinance services, satisfy the needs of citizens and entrepreneurs in financial resources and services for improvement of their business activity.

Meaning of concepts such as “microfinancing”, “microcredit”, “microloan” and “microleasing” are disclosed in the law. Provision of microfinance services is conducted o­n the basis of regulations for rendering microfinance services, established by the organizations, which provide such services. In this, the law includes a requirement that given regulations must be accessible for general familiarization.

To use microfinance services the juridical and physical entities file a special application and other documents, which contain information about their activities and incomes to the organization that provides such services. Consideration of the application is carried out within ten working days. During consideration of the application, an analysis will be conducted for the revelation of the income sufficiency level of the applicant, absence of contradictory data, stated in the application, and ability of the applicant to timely fulfill liabilities. In the case of rejection, the applicant will be informed in written form, and given the affirmative decision a written contract will be concluded with the applicant. Content of the contract is described in the article 14.

The Law empowers the borrower to relinquish from unused sum of microfinance service within two weeks from the date of conclusion of the contract. Organization, which provides microfinance services, is empowered in unilateral order to rescind the contract, if borrower did not utilize the provided microfinance service within a month from date of conclusion of the contract.

Articles 16 and 17 determine the rights and liabilities of the borrower and organization, which provides microfinance services.

According to the article 18, fulfillment of liabilities by the borrower is assured by the guarantee of the bank or insurance company, of the third parties, bail of property or securities, including the security deposit, savings certificates of banks and other methods, envisaged by legislation and contract. In this, the volume of the borrower’s income and assurance, presented by him, for fulfillment of liabilities in line with the contract must be enough to return the sum of the received microfinance service and pay accrued interest.

Under article 19, the borrower is empowered to return the sum of received microcredit or microloan in advance, and pay accrued interests for the period of its actual usage.

Embassy of Uzbekistan
Perleberger Str. 62
10559 Berlin
Phone: 030 39 40 98 13
Fax: 030 39 40 98 62
www.uzbekistan.de

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