Humo Becomes Leading MFI in Tajikistan After One Year

The majority of Tajikistan’s population lives below the poverty line, making it the poorest country in Central Asia. Tajikistan’s economy remains dependent on workers’ remittances, leaving it vulnerable to fluctuations in the international economy.

Tajikistan has a dedicated group of organizations working to provide microloans (between $25 - $500) to its rural poor. Most banks do not consider the rural poor as potential clients because they are in isolated areas and often are poor and landless women, farmers and female-headed households. However, several microfinance institutions (MFIs) began operations in 1993 in Tajikistan to assist small-scale entrepreneurs in accessing working capital loans. This microfinance community has been successful in its outreach with over 90 percent of small-scale borrowers in Tajikistan being served through the outlets provided by the MFIs.

Humo, an emerging leader of MFIs in Tajikistan, launched its activities in March 2005 as a successor to a project begun by CARE International. Humo supports the development of profitable small enterprises by providing microloans and training its borrowers to make business plans and simple calculations of income and expenses. Currently, Humo has a portfolio of $500,000 and 3,000 clients. Humo has received significant support with its development of strategic business plans, financial forecasting and board leadership from ACDI/VOCA’s Central Asia Microfinance Alliance (CAMFA), which is a USAID-funded regional microfinance support project. As a result, Humo secured its first commercial loan of $200,000 from Frontiers, LLC, a regional wholesale lending institution.

Executive Director of Humo Mavsuda Vaisova said, “Humo has operated just for a year. However, thanks to the technical assistance and financial aid of CAMFA, it is now considered one of the leading MFIs in Tajikistan. With assistance from CAMFA, we have developed better systems and internal procedures. We also have received funding for staff training and to purchase new accounting and MIS systems. During a very short period of eight months, CAMFA staff has provided us with more significant technical support than our other international consultants.”

CAMFA assisted Humo’s executive director and finance manager to gain sound knowledge and experience about best practices from other regional MFIs and helped them introduce a new incentive system. Because of these and other improvements, Humo has realized a three-fold increase in loan officer productivity and a corresponding reduction in client delinquencies. It is expected that in five years, the portfolio of MFIs in Tajikistan will reach approximately $24 million. These projections are based on the institutional strengthening of MFIs such as Humo. One of Humo’s long-term goals is to become a deposit-taking institution that would allow them to create deposit accounts for the very poor.