Rotating micro-credit associations help improve livelihood in south

Khosiyat Khojakulova is an elementary school teacher in the southern Uzbek city of Termez, capital of the Surkhandarya province. Like many other teachers in the region, she is trying hard to make a living. “I earn about US $30 a month and the earnings of my husband are not big either. We have four children so it is difficult to provide for our family with this amount of money,” Khosiyat told IRIN. Her luck changed in May, however, when she took part in a unique project - the Rotating Savings and Credit Association (ROSCA) - implemented by the local Tadbirkor Ayol resource centre and supported by Community, Habitat and Finance (CHF) and the International Counterpart Consortium, two US-based NGOs. "In some cases with the help of this programme, the unemployed find jobs and many are becoming more optimistic about their future,” Khosiyat said. “Each of us in the group contributes 6,000 sums [US $6], meaning that every month one of us receives 30,000 sums [$30]. Even though this is not a big sum, we can do something with this money.” Barnogul Tokhirova, a trainer with the USAID-funded Community Action Investment Programme (CAIP), told IRIN that it was virtually impossible to receive micro-credits in the banking system, while under the ROSCA programme people could help each other by collecting their savings. “This project is not supported by foreign funds. The purpose of this credit and savings programme is the investment of people's spare money into common causes depending on their opportunities," Tokhirova explained. Participants could use the savings to open a small business and thus improve their livelihoods, she maintained. "Although it does not require a big amount to open a small business, banks do not provide loans for such purposes. But it is quite possible under the programme.” She gave an example of the Shirinobod village of Nishan district, where a ROSCA group called Swallow operates. The group includes 10 girls who recently finished secondary school. Each contributes $3 a month and every month two of them go to the provincial capital, Karshi, to study at the vocational training centre there for about $30. In the future, the girls are going to create a sewing workshop in their village, an intention worth emulating. Ilkhom Mukhammadiev, a worker at a cotton factory in Termez, participates in several similar micro-credit groups. He has already received around $75 so far. “I had my apartment repaired for the money I received first time,” Mukhammadiev said, adding that he was planning to start his own business with money from the ROSCA scheme. ROSCA groups are established by local people with a minimum of outside help. Participants get together, develop charters and determine the amount of the capital required to take part. Every month people in the group contribute a certain amount of money, the total is then given to each member in turn. "ROSCA was created on the basis of these associations, for example, 16 groups have been formed in Kashkadarya province and 18 groups are working in Surkhandarya province,” Sokhiba Khojakulova, head of the Avlod, an NGO and implementing partner of the project based in the southern city of Karshi - capital of Kashkadarya province, told IRIN. Earlier in April, CHF International conducted training under the family micro-credit project and after having learnt the necessary skills, local people began creating ROSCA groups on the ground. “We organised activities in two southern provinces of the country and the results were successful,” Mark Granius, CHF International's deputy head of the mission, told IRIN. “Village residents have shown the biggest interest,” said Bekzod Yuldashev, a programme coordinator with Counterpart International in Kashkadarya. He added that the number of members in each group varies from five to 12 people, while the minimum contribution is less than a dollar.