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  • “The most important thing,” Rukhshod stresses, “is to serve the people and to resolve people’s problems. This is the main thing, and the most important thing to my work here.”
    AKDN / Christopher Wilton-Steer
Rukhshod’s Story: Ensuring financial services in rural areas

Meet Rukhshod, director of a national micro-lending organisation (MLO) in Tajikistan, with five branches across three regions. Once a housewife in a small village, Rukhshod’s journey into this position began when she became the manager of the women’s committee of a small village organisation. Her natural ability to engage community members to ensure all voices were heard gained her early respect and recognition amongst her peers. In 2007, when several village organisations in her area merged into a federation, Rukhshod was selected to lead it, and thrived doing so.  Four years later, in 2011, Rukhshod was appointed director of the regional MLO ‘’Rushdi Pomir”. Thanks to Economic and Social Connections: A Multi-Input Area Development Financing Facility for Tajikistan (ESCoMIAD), a joint project of the Aga Khan Foundation (AKF) and the U.S. Agency for International Development (USAID), Rukhshod received trainings in business planning, financial statement analysis and cash management that enabled her to excel in this role. Her background in economics also paved the way for quick absorption of the material.

Over the last few years, ESCoMIAD has made significant strides in developing the capacity of staff like Rukhshod, while also strengthening MLOs to create an environment that makes financial services accessible to low-income, rural households.

What are micro-lending organisations?

In recent years, funds from village organisations like Rukhshod’s grew and civic leaders began to implement local development initiatives. In 2004, a new law in Tajikistan required that all informal lending be formalised to improve accountability, thereby establishing the micro-lending organisation, or MLO, in the country. Further regulations since then have increased the threshold base of capital required, as well as security and recordkeeping measures.

To ensure access to quality financial services in rural and remote areas, in 2016 AKF supported the merging of five MLOs in three regions of Tajikistan where it operates, forming one national MLO “Rushdi Kuhiston”. The MLOs grew out of governance structures of the village organisations, and eventually became their own entities owned by the community as shareholders. Trainings, improved financial systems and new loan products tailored to local needs have ensured the consolidated MLO adapts to a changing regulatory environment and economic circumstances.

In 2016, the MLO Rushdi Kuhiston’s headquarters was established in Khorog, where Rukhshod is now based as the national director. Since then, US$ 1.5 million in loans has been distributed, supporting household consumption and small business investments. Most noteworthy, the organisation is financially sustainable, and returning dividends to the communities’ shareholders. New innovations have also been introduced: All branches are now operating with a secure, real-time connection to an integrated banking software, allowing offices as far as remote border areas near Afghanistan to record updates on new loans and repayments.

Community rooted, locally owned

Like other MLOs supported by ESCoMIAD, MLO Rushdi Kuhiston takes a community-based approach to financial access. It is, in essence, a financial institution with a local face.

Rukhshod is proud to be one of those faces.  For her, it’s not about the number of loans distributed. The most important thing is how many ordinary people “stand from poverty” and feel supported in the absence of a traditional banking system and benefit from the loan, no matter how small the amount.

“The most important thing,” Rukhshod stresses, “is to serve the people and to resolve people’s problems. This is the main thing, and the most important thing to my work here.”

Filling a gap in financial services, the MLOs, combined with the support of the village organisations, enhance the resilience of communities in the region.

“We have very poor people here. Our region is the poorest in Tajikistan,” Rukhshod says. “In comparison to other parts, we don’t have factories; we don’t have much opportunity. People don’t have economic opportunities. And I know they’re struggling. I was struggling before I came step-by-step into this position. And that’s why I wanted to help support them.”

By supporting local economies and local people, ESCoMIAD is expanding access to social and financial opportunities. Greater access to finance, especially, will make a sustainable difference in the lives of people in Tajikistan, like Rukhshod and her clients – helping them meet their own needs and develop their communities.

This article was adapted from a story first published on AKF USA’s website.