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First MicrofinanceBank Tajikistan (FMFB-T) was established in 2003, the first fully licensed commercial bank in the country to have micro-credit as its principal focus. This license has allowed it to expand activities to small and medium enterprises. FMFB-T is now one of the largest providers of financial services in the country, servicing around 20,000 clients with a loan portfolio exceeding US$ 50 million, and around 40,000 individual depositors.

Tajikistan is one of the poorest countries in the world, with the lowest per capita GDP of the 15 former Soviet republics and almost half the population living on about US$ 1 a day. The economic environment of the mountainous region is deteriorating as sanctions against Russia, the country’s main economic partner, significantly hamper remittances (which account for about half the country’s GDP) and have contributed to the currency’s sharp depreciation.

Operating in Tajikistan since 1992, AKDN draws on a strong base of experience in working with mountain societies. It works in all regions of the country and employs over 3,500 people. Programmes range from economic development by establishing new enterprises, to opening schools and health centres.

FMFB-T offers a broad range of services and is actively engaged in research, product development and innovation as part of its focus on improving the quality of life of its clients, of which over 70 percent live in rural and remote areas, through access to financial services. For example, its development of remittances-linked financial products aims to ensure an increased portion of remittances are allocated to fundamental requirements such as housing, education, health or asset building. As part of its commitment to the country, FMFB has worked with the Grameen Foundation to develop a Progress Out of Poverty (PPI) scorecard for Tajikistan, widely used in microfinance to measure poverty outreach, and the first time it has been done for that country. Together with UNHCR, FMFB has also begun a project to lend to Afghani refugees.

FMFB has taken measures during the crisis to improve efficiency while keeping branches open and interest rates stable despite the higher cost of USD funding (the bulk of the bank’s total credit distribution). In the current environment, saving is even more critical: FMFB’s ‘Homeland’ product, supported by a grant from Canada’s DFATD to promote remittance-linked savings by offering a higher interest rate, is intended to promote a culture of saving, with workshops about the product held in Moscow, where most migrants are located, as well as in-country to raise financial awareness. Escomiad, a Multi-Input Area Development Financing Facility for Tajikistan established by AKF and USAID, is helping catalyse FMFB’s portfolio of loans to SMEs to help create jobs and promote economic growth. FMFB is one of the very few organisations offering housing finance, which focuses on non-urban areas and is supported by a loan from KfW, which allows FMFB to provide longer-term loans at subsidised rates, and a grant from DFATD to facilitate work with other AKDN programmes in order to link seismic resistant construction techniques with housing finance. To promote services for women, a lottery is held twice a year for females only, with the winner receiving an account in her name.