For many rural households in Uzbekistan, owning a house is no longer a dream; it has become a reality. Uzbekistan’s Rural Housing Scheme provides mortgage loans to homebuyers from rural communities and financing opportunities for women to establish small businesses. The housing program has increased living standards and reduced income disparities between urban and rural populations.
As a result of financing provided under the project by the Asian Development Bank, the Islamic Development Bank, and the government, more than 12,000 rural families in all 13 regions of the country now have houses with modern conveniences such as hot and cold running water, piped gas, and indoor toilets.
Many developing countries in Asia suffer from overcrowded and poor-quality housing. The impact of housing ripples from human welfare to the overall socio-economic health of a country, especially in emerging economies such as Uzbekistan. There is a direct correlation between improved housing conditions and improved living standards, especially for women.
Interventions
In 2009, the Government of Uzbekistan launched a program to construct new housing for the rural population throughout the country. The program was designed to reduce disparities between the country’s urban and rural populations by increasing living standards and providing job opportunities in rural areas. In 2010, the government requested ADB’s support to expand the program. The next year, ADB approved a $500 million multitranche financing facility called the Housing for Integrated Rural Development Program. In the third tranche of the facility, which was implemented from 2015 to 2017, ADB provided funds for 2,929 mortgage loans provided by two state-owned banks, while the Islamic Development Bank funded the construction of 1,415 houses. An additional 7,971 mortgage loans were provided by the banks using credit lines provided by the government.
Results
Women received 32% of the loans. Beneficiaries were socially prioritized according to 19 criteria, including income, household size, primary occupation, and access to utilities and social services. The loans were used to finance the construction of houses in 212 sites in rural areas throughout the country.
The project also strengthened the capacity of 7,690 government staff involved in housing and rural development processes. 14% of the staff trained were women.
Another project outcome was a large increase in microfinance loans in rural areas, to SUM1,341 billion by December 2016. In part, this increase reflected increased economic activities in the program sites. Some 31,121 new micro, small, and medium enterprises (MSMEs) were established in 2015 and 2016, exceeding the target of 10,000 by 211%. Women established 9,723 (31.2%) of these businesses.