Regulation and Supervision of Credit Unions in Uzbekistan presented by NIZOMIDDIN Muradov Central Bank of the Republic of Uzbekistan Baku, Azerbaijan November 10-11, 2004

Credit Unions predominantly involved in the small and microbusiness; offer loans both in cash and non-cash, time and saving deposits of different terms suitable to individual members; terms of microloans: max 9 mo.; popular: 3 to 6 mo’s av. size of loans: $500 – $1,000 types of microloans: trading, agricultural, consumer interest rates on loans: 5 to 7% a month interest rates on deposits: 2 to 5% a month

Credit Unions: Results (as of Oct. 1, 2004) 20 credit unions registered; number of members – 12,000 Membership growth - 15% a month. Loans / Total Assets - more than 80% Deposits/Assets - 70%

Overview of Regulatory Requirements for Credit Unions Credit unions in Uzbekistan operate based on the following laws and regulations: Law on Credit Unions; Regulation on licensing and registration; Regulation on financial transactions; Regulation on accounting; Chart of accounts.

Organizational Structure of CU Supervisory Body

Credit Union Supervision System in Uzbekistan Central Bank has the right to: Review reports and other documents of the credit union Receive information on the activities performed by the credit union Perform inspections of the credit union Issue instructions on elimination of violations identified in the credit union operations and mandate their implementation

Credit Union Supervision System in Uzbekistan Establish qualification requirements for the Chief Executive Officer Impose restrictions on performing specified financial operations for the term not exceeding six months Suspend or terminate the license issued to the credit union.

Required Regulatory and Supervisory Changes Adding missing powers in the legislation and developing procedures for utilizing such powers. Training Central Bank’s field staff in performing on-site supervision of credit unions based on the best practices in the field. Improving co-ordination between on-site and off-site supervision.