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 urban and rural disparities by increasing the living standards, incomes, and job opportunities in rural regions. Three state-owned commercial banks: Qishloq Qurilish Bank (QQB), National Bank of the Republic of Uzbekistan for Foreign Economic Activity (NBU), and Ipoteka Bank participated in the program to provide mortgage loans to home buyers to purchase newly built houses in rural areas.
In 2010, the government requested for support from the Asian Development Bank (ADB) to expand the program. In response, ADB approved in August 2011 a $500 million multitranche financing facility (MFF) for the Housing for Integrated Rural Development Program. The program had three components: (i) provision of housing loans through participating commercial banks to targeted creditworthy borrowers; (ii) capacity building of local governments to pursue integrated rural development plans and investment promotion strategies; and (iii) improvement of the enabling environment for micro and small enterprises (MSEs) to expand or establish new businesses and create jobs in rural areas.
The MFF was originally planned to be delivered in four tranches—one for each year over 2012– 2015. Eventually, ADB divided its support into three tranches—the first for 2012, the second for 2013 and 2014, and the third for 2015. ADB approved the $200 million loan for the tranche 1 project in September 2011, the $200 million loan for the tranche 2 project in October 2013, and the $100 million loan for the tranche 3 project in August 2015.
The actual number of housing loans provided under the three projects was 38,461 or 98.6% of target, with a value of SUM3.3 trillion (about $1 billion) or 138% of target, of which 23.7% went to women. The mortgage loans financed the construction of houses in 1,247 massifs (rural housing sites) throughout the country, most of which were near existing communities. On average, home buyers made down payments equal to 36.2% of the purchase price, decreasing from 40.6% in 2012 to 29.1% in 2015. A 15-year mortgage loan funded the remainder of the purchase price.
The same three basic house designs were available in 2012–2015, although minor changes were made year after year. A total of 34.2% of home buyers selected a 3-room house, with a floor area of 134 square meters (m2); 64.2% selected a 4-room, 143 m2 house; and 1.6% selected a 5-room, 181.75 m2 house. The houses cost a weighted average of SUM170.014 million (about $53,100)—SUM164.68 million for the 3-room house, SUM172.40 million for the 4-room house, and SUM196.75 million for the 5-room house. Nearly all the houses were situated on 600 m2 lots, provided without cost to homeowners by local governments.
Against a target of at least 65,000, a total 30,493 local government staff—13% women—received training on integrated rural development planning and investment promotion. Against a 90% target, rural microlending increased by 165% from 2012 to 2016. A total of 55,463 new rural MSEs were established in 2011–2015, with support from the program.
Successful output deliveries, many in excess of targets, enabled the program to achieve its intended outcome of down streaming the rural housing scheme to moderate- and lower-income beneficiaries, with a focus on women. Prior to ADB’s involvement in the government’s rural housing program in 2011, less than 1% of loans provided were made to moderate- and lower-income borrowers, households within the second and third-income quartiles. The proportion rose to 99% in 2012, 96% in 2013, 100% in 2014, and 66% in 2015. The adoption of defined beneficiary selection criteria and an improved public awareness campaign made these achievements possible. The MFF outcome of at least 40,800 new rural modern homes occupied by targeted beneficiaries was achieved, with a total of 41,510 houses built. However, the gender outcome target—that 30% of the beneficiaries be women—was not achieved. Women received 23.7% of the loans for 2012–2015.
Successful program implementation overall made a significant positive impact on the living conditions of about 183,000 people, now living in modern houses with conveniences such as indoor kitchens, indoor plumbing, and potable hot and cold piped water. The program had the Ministry of Economy as executing agency and implementing agency for components 2 and 3. QQB was the implementing agency for tranche 1 component 1, and along with NBU, also for component 1 of tranches 2 and 3.