Building Climate Resilience in the Pyanj River Basin

Less stringent selection criteria, which enables the participation of more eligible financial institutions, could optimize the impact of microlending short-term, low-interest loans in unbanked but regularly earning agricultural communities. The selection of partner participating financial institutions (PFIs) for the microlending component of this project may have been too strict. This resulted in the participation of only 3 of the 6 large PFIs in Tajikistan, all of which are foreign-owned and likely to have been effective partners. Nevertheless, by relending proceeds from repaid loans, the PFIs extended loans to 1,934 borrowers against a target of 1,000 at appraisal. About 80% of borrowers were unbanked, first-time clients and almost all sub-loans had terms of under 2 years (6–12 months and 12–24 months). One reason there was almost no uptake of 5-year loans was the high interest rate on these loans (28% in local currency).