The implementation of microcredit programs started in Tajikistan in 1998-2000 by international organizations such as Care International, Mercy Corps, ACTED, the Aga-Khan Foundation, German Agro Action / Welthungerhilfe, Counterpart Consortium and United Nations Development Program in cooperation with local non-governmental organizations such as the National Association of Business Women of Tajikistan (NABWT), OS “Sitorayi Najoy”, NGO “Mehrangez” and NGO “Oila”.
The project work of these organizations resulted in the expansion of access to financial resources for people with low income for micro businesses, trade, production as well as small scale service provision.
The starting point for the formation of the legislative and regulatory framework for the activities of microfinance organizations and the development of microfinance sector was a Memorandum of Understanding between National Bank of Tajikistan and USAID (developed by the International Financial Corporation), and the Law of the Republic of Tajikistan “On Microfinance Organizations” passed in 2004. This legislative basis allowed incorporating microfinance activities and turning the microfinance sector in Tajikistan in terms of legislation and organizational structures into a significant part of the national financial system, which is able to provide financial resources to the most vulnerable population and stimulate the entrepreneurship and small business development.
The Association of Microfinance Organizations of Tajikistan (AMFOT) is a noncommercial organization, which offers different services to its member Microfinance Institutions (MFIs) on a voluntary basis, including training, lobbying and dissemination of information. These activities are aimed at facilitating the development of the microfinance sector in Tajikistan. The Association was officially registered in January 2004 and is considered one of the first microfinance associations in Central Asia. The coalition of MFOs in Tajikistan consisted of both local organizations such as OS “Sitorayi Najot”, NGO “Mehrangez”, National Association of Business Women of Tajikistan (NABWT) as well as international organizations Care International, Mercy Corps, ACTED, the Aga Khan Foundation, German Agro Action, Counterpart Consortium.
Since February 2005, the Association started a productive cooperation with in the project “Support of Microfinance Services in Rural Areas” financed by the German Technical Cooperation (GTZ) and from 2009 also with Regional Project of German Technical Cooperation “Support of microfinance sector in Central Asia”.
Since November 2006, the Association started its cooperation with the Dutch Agency for Development (ICCO), an organization supporting newly established financial institutions which provide constant access to financial services for the poor and low income population with priority of rural financing.
The German Development Service (DED) is one of the leading European services on directing experts and provided a consultant to support the institutional development of AMFOT’s sub-office in Khujand, Sogd oblast.
Due to the fruitful support of these organizations, the Association of Microfinance Organizations of Tajikistan (AMFOT) became an important resource center of the microfinance sector in Tajikistan and a nationwide forum for interrelation of microfinance organizations with the Government of the Republic of Tajikistan, the National Bank of Tajikistan, other regulatory bodies, civil society, international donors and investors.
AMFOT is striving to form a sustainable national network of microfinance institutions which are key participants in decision taking in the financial system of the country and within its mission AMFOT assists in the formation of a favorable legal environment, provides professional services for training and consultations for microfinance organizations and assists in the introduction of national standards of microfinance activity.
AMFOT has developed into an efficient organization which is able to defend and represent the interests of its members. It has an operative information system in place which helps it to coordinate its activities, an effective staff training system for the microfinance sector, as well as support facilities of small and medium microfinance organizations.
The Association is cooperating with different microfinance institutions, irrespective of their organizational-legal form, location, financing principles, size and level of development. The Association’s activity is based on principles of fairness, transparency and high quality of provided services. Presently the Association unites 62 of the more progressive and sustainable microfinance organizations.