Tashkent, Uzbekistan (UzDaily.com) -- During a recent plenary session of the Legislative Chamber of the Oliy Majlis, a bill aimed at enhancing the microfinance sector was reviewed and approved in its first reading.

The discussion highlighted that this bill creates a legal framework for the establishment of microfinance banks—a legal entity authorized to provide banking services under regulated conditions. The bill also allows for the transformation of microfinance organizations into microfinance banks and vice versa, as well as their conversion into commercial banks.

In recent years, there has been a growing demand for microfinance services. However, limitations in the operations of non-bank credit organizations, such as restricted access to additional financial resources, prevent these organizations from fully providing microfinance services to a broad range of consumers.

Furthermore, the lack of clear organizational and legal foundations for microfinance organizations with the potential to operate as commercial banks, along with the significant difference between the minimum capital requirements for commercial banks and microfinance organizations, constitutes a serious obstacle to their development.

According to the deputies, the adoption of this bill will address the need for local financial services by increasing access to microfinance services in the regions. The primary focus of microfinance banks will be on financing small and medium-sized business projects, supporting entrepreneurial initiatives among the population.

The bill was passed in its first reading by the deputies.