EU, IFAD, and Hamkorbank Launch Program to Support Rural Business

Tashkent, Uzbekistan (UzDaily.com) — The International Fund for Agricultural Development (IFAD), the European Union, and Hamkorbank, one of Uzbekistan’s leading banks, have launched a program aimed at developing rural entrepreneurship and expanding financial access. The initiative targets nearly 4,000 households, including remittance recipients and returning migrants.

The program introduces a new credit scoring model that considers funds sent by family members working abroad, as well as savings of returning migrants, as proof of creditworthiness. This system is designed to overcome traditional barriers that prevent many rural residents from accessing formal banking services due to the lack of official income or credit history.

“Recognizing remittances as a reliable source of income for credit assessment can open up numerous opportunities for rural families,” said Pedro de Vasconcelos, Manager of the Financial Mechanism for Remittances at IFAD. He noted that the pilot innovative solution is being implemented jointly with Hamkorbank under the Central Bank’s regulatory sandbox and could become a model not only for Uzbekistan but for the wider region.

The model, co-financed by the European Union under the REMIT PRIME program in Central Asia, aims to transform remittance income and savings into productive investments, sustainable businesses, and more stable livelihoods for rural households.

Christos Marazopoulos, Head of Cooperation at the EU Delegation to Uzbekistan, emphasized that the EU supports initiatives that enhance financial inclusion and adapt systems to the realities of migrant families. Under the EU’s Global Gateway strategy, innovative solutions such as integrating remittances into credit scoring and promoting rural entrepreneurship are encouraged. He highlighted that this project exemplifies investment in people, resilience, and long-term economic growth.

Hamkorbank serves nearly 900,000 remittance recipients, accounting for about 20% of the Uzbek market. With its extensive network in rural areas, the bank has significant potential to expand financial inclusion and scale innovative solutions nationwide.

Hikmatullo Alikhonov, Chief Risk Officer and Deputy Chairman of Hamkorbank, stated that migrant households have substantial entrepreneurial potential when provided with access to appropriate financial instruments. The project will expand services in underserved rural areas and implement an innovative credit scoring model, creating new opportunities for many families.

In Uzbekistan, remittances remain a crucial source of income for numerous households. In 2024, remittance inflows totaled US$14.8 billion, exceeding 10% of the country’s GDP. Rural communities and returning migrants often face structural barriers to credit and business support, leading to informal employment or repeated migration.

The REMIT PRIME program initiative aims to reverse this trend in line with Uzbekistan’s National Development Strategy through 2030, which prioritizes the economic reintegration of returning migrants.

In addition to financial support, the program will train 900 rural residents in entrepreneurship and financial literacy, with at least half of participants being women. Another 100 participants will receive individualized mentoring to start or expand businesses in agriculture, agro-processing, transport, and other services.