2009 Tajikistan Microfinance Analysis and Benchmarking Report

The microfinance sector in Tajikistan has played an important role in increasing access to finance for the country’s population in the last five years. There are 12 commercial banks, seven credit societies, and 88 microfinance institutions (MFIs) operating in Tajikistan as of 1 January 2009, providing 200,000 clients with microcredit services. MFIs in Tajikistan registered high growth rates in recent years, but in the advent of the financial crisis and economic slow-down in the region they faced heightened risks and challenges:

• Slow-down in growth by the end of 2008 and in 2009;
• Significant foreign exchange risk exposure for MFIs funded by foreign investors;
• Deteriorating portfolio quality as remittance flows from Russia decreased.

At the same time, Tajik MFIs exhibited positive results in their performance despite increased challenges in 2008:

• Positive adjusted returns despite double-digit inflation;
• Improved efficiency for large MFIs.

This report, produced jointly by AMFOT and MIX, explores the trends in performance of Tajik MFIs over the past three years. It provides an analysis of the various actors in the sector, growth and funding trends, and financial performance indicators. It draws attention to the two-tier structure of the Tajik market: proliferation of small MFIs which operate in more remote and inaccessible areas vs. a concentration of several larger, highly leveraged banks and non bank providers.