The end of the year

Along with the reforms initiated by the President and the state in all spheres of life, the mortgage lending market was not an exception. In particular, the Decree of the President of the Republic of Uzbekistan No. 5715 of May 13, 2019 - "On additional measures for the development and expansion of the mortgage lending market" was adopted, where a "road map" was approved with specific measures to reform the industry.

In the course of research and analysis, it was revealed that the main obstacle to the development of the mortgage lending market was the lack of long-term available resources in the country's financial market. In this connection, a number of measures were taken to expand and develop the mortgage lending market. As part of the measures spelled out in the decree, it was envisaged to introduce the " Mortgage Market Sector Development Program" developed jointly by the Asian Development Bank and the Ministry of Finance, where the cornerstone and structural elements of the program is the creation of Uzbekistan Mortgage Refinancing Company (UzMRC).

UzMRC was founded by the Ministry of Finance of the Republic of Uzbekistan on November 4, 2019 and was registered as a joint-stock company. In a short period of time, from the foundation until the receipt of the first funds from ADB, on October 13, 2020, UzMRC has done a significant amount of work. In particular, highly qualified staffs are recruited, developed and implemented a full range of internal policies and procedures for operation, fulfilled all the requirements of the regulator and was registered in the register of the Central Bank as a non-bank credit institution, agreed and approved the company's chart of accounts with the regulator, signed an agreement on on-lending funds from ADB with the Ministry of Finance, underwent a comprehensive analysis and study by ADB and was approved as the project executing agency, increased its share capital by 4 times, including in the shareholders, along with the Ministry of Finance, 12 largest commercial banks of Uzbekistan, of which 4 banks are private commercial banks.

The mission of the company is promoting affordable housing for a wide range of people pursuing and fulfilling the following goals:

• Development of the mortgage market by providing the banking system with long-term financial resources;

• Development of the local capital market through the issuance of debt securities;

• Promotion of international practices and standards for mortgage lending in the market.

Actively following its main mission, providing long-term available resources to the banking sector, in such a short period of time, UzMRC, together with ADB, conducted Due Diligence analysis of 8 commercial banks. Of these 8 commercial banks, 7 commercial banks were allocated resources equal to 303 billion UZS.

Even though the first resources were provided to commercial banks starting from October 13, 2020, 48 billion UZS have already been disbursed and affordable mortgage loans have been provided for the population that meets the requirements of the Company, namely, 223 families, giving them the opportunity to purchase housing. It is important to note that from the resources of UzMRC it is possible to purchase real estate in a mortgage and from the secondary market, this circumstance provides an opportunity to make mortgages even more affordable, which is confirmed by the data, 97% of all mortgage loans from the company's resources were issued for the purchase of housing from the secondary market. Also, since October this year, 2 loans have been issued for real estate renovation.

It should be noted that UzMRC supports the social activity of the female part of the country's population. At this stage of lending, women borrowers make up 27% of all borrowers, which is an important indicator.

In the short and medium term, UzMRC intends to implement the following goals and objectives:

• The company in the first months of 2021, for greater coverage of the population, intends to additionally attract commercial banks and provide resources to all participating commercial banks that have undergone a comprehensive analysis of the company and ADB.

• Work to improve the mortgage lending system, introduce modern methods and tools for the development of the mortgage market, increase liquidity and reduce risks in the mortgage lending and mortgage securities market;

• Improving the methodological and regulatory framework in the field of mortgage lending and refinancing, by attracting foreign experts, as well as with the participation of local experts. In particular, in 2021, develop and implement in the financial market a mechanism for encumbrance of claims for mortgage loans as a basis for the appearance on the market of mortgage-backed securities.

• Start issuing securities, primarily corporate bonds, achieve their acceptance by the central bank for repo transactions, in the medium term, start issuing mortgage-backed securities and their placement among investors;

• Start raising financial resources in the local and international markets of loan capital, including funds from international financial development institutions and other financial organizations, with their subsequent directing to refinancing mortgage loans;

All the above tasks and goals are only for the beginning of UzMRC's activities, the company is not going to limit itself to these goals and intends to become an integral part of the country's financial system, moreover, the company is determined to lead the mortgage direction of the country's financial life by becoming a multifunctional universal mortgage company.