In 2009, the government of Uzbekistan launched the flagship Rural Housing Scheme that channeled rural savings into housing investments and utilized local contractors and construction materials to generate jobs and stimulate the construction industry. Under the scheme, 847 houses were built in 2009 and 6,800 houses in 2010. Mortgage loans, made available by the state-owned Qishloq Qurilish Bank (QQB), financed the scheme.
In 2010, the government requested for assistance from the Asian Development Bank (ADB) to expand the housing scheme. In response, ADB approved in September 2011 a $500 million loan, to be provided through a multitranche financing facility (MFF), for the Housing for Integrated Rural Development Investment Program. While the program had 3 components, the MFF focused on providing housing loans for targeted creditworthy borrowers via participating commercial banks. From 4 tranches originally, the MFF ultimately consisted of 3 tranches.
Tranche 1, approved along with the MFF for $200 million, financed 10,279 of the 21,000 subloans targeted for the entire MFF. These subloans, a little short of the 10,300 tranche 1 target, were provided in 146 of the country’s 159 rural districts, and 21% went to women. On average, the new homeowners contributed down payments equal to 40.6% of the purchase price, with the remainder funded by a 15-year mortgage loan. The loan amounts were the same for a given year.
To make the homes more affordable, the government has exempted homeowners from paying property tax while the loans are outstanding. Additionally, they do not have to pay taxes on incomes used for mortgage loan payments. Three house designs were made available: a 3-room house, with 134 square meters (m2) of floor area; a 4-room house, with 143 m2 floor area; and a 5-room house, with 181.75 m2 floor area. The houses cost an average of $53,660 as December 2012. All houses were situated on 600 m2 lots provided without cost by local governments.
Other key outputs, financed by government, comprised the training in integrated rural development and investment promotion of 11,000 local government staff, 13% of whom were women; and the establishment of 1,533 micro or small enterprises, 38% of which comprised women enterprises.
Successful attainment of the output targets enabled the project to achieve its intended outcome of down-streaming the government’s rural housing scheme so that it would benefit moderate or lower−income people, especially women. Prior to ADB’s involvement in the government rural housing scheme, less than 1% of the loans provided went to moderate- and lower-income borrowers, consisting of households within the second− and third−income quartiles. After ADB became involved, the proportion of borrowers in the lowest 3 income quartiles increased to 99% in 2012 and 96% in 2013. This was due to the adoption of well−defined beneficiary selection criteria and an improved public awareness campaign. Women received 20% of the loans in 2012 and 23% in 2013.
ADB’s Central and West Asia Department rated the project successful. Uzbekistan’s Ministry of the Economy was the executing agency. The QQB was the implementing agency for the ADB−financed component.