Housing Finance Programme Tajikistan

Thematic Area:	Affordable Housing Finance
Duration:	2014 - 2019
Client:	Ministry of Economic Development and Trade (MEDT) / Kreditanstalt für Wiederaufbau (KfW)
Region:	Turkey, Caucasus & Central Asia
Country Coverage:	Tajikistan

Project Overview

As in many other emerging countries with a young and growing population, Tajikistan faces unmet and increasing demand for affordable housing finance products. The home finance sector is still comparatively underdeveloped and faces many constraints.

The primary objective of the Project is to increase the affordability of housing loans for low and middle-income households in rural areas of Tajikistan. This objective was reached by developing and introducing new, affordable housing loan products in local currency and managing the facilities through four selected Partner Financial Institutions (PFIs).

Phase I of the Project commenced in September 2014. Frankfurt School experts started by developing and introducing new housing finance products in the Tajik market, etsablishing housing lending standards and procedures for the PFIs, and managing the disposition fund facility. In addition, Frankfurt School developed a mechanism for the project co-financing by the PFIs. During the next two years, EUR 7 million (equivalent in national currency) were lent to the

Project beneficiaries (clients) through the PFIs. The successful utilisation of the Phase I funds led to an increase of funding by KfW and the initiation of Phase II. Phase II started in early 2017 with additional EUR 7 million. Due to the embeded co-financing mechanism, the total number of beneficiaries under both phases reached nearly 10,000, accounting for more than EUR 25 million in housing loans. During implementation, the Frankfurt School team also:

Developed and negotiated lending agreements with PFIs on behalf of MEDT;
Developed marketing strategies for housing finance products related to improvement/renovation, energy efficiency, construction/extension and purchases as well as implementation support;
Trained and built capacities of financial institutions and end beneficiaries; and,
Supported PFIs in Risk Management, IT/MIS and other areas.