Access to financing: a source of financial autonomy

In Tajikistan, more than half the Gross Domestic Product comes from remittances from Tajiks who have emigrated abroad, where they often have insecure jobs. Consequently, it’s vital to boost rural areas to enable local people to create new opportunities for themselves.

However, a significant proportion of the rural population has little access to financial services and microfinance institutions like Furuz want to change this. They give micro-entrepreneurs in the agricultural sector the opportunity to create or expand their activities.

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Furuz and support for local communities

Furuz supports more than 3,500 micro-entrepreneurs in western Tajikistan. Almost a third of Furuz’s portfolio is dedicated to financing agriculture and livestock farming, making it powerful vehicle of financial inclusion.

• For more than half of its clients, Furuz is the first institution they were ever able to borrow money from.
• With financing that’s adapted to their needs, smallholder farmers can purchase better quality seeds and fertilizers to improve their production, generate more profits and work their way out of poverty. For 35% of farmers, their activity would not be financially viable without this financing, which helps increase their profits by a third, on average.
• By making their activities more profitable, Furuz enables smallholder producers to reduce their vulnerability to external shocks such as droughts, climate events, insect infestations and volatile market prices. More than 90% of the farmers who make up Furuz’s clients have experienced a crisis like this in the last twelve months, that has average annual income by 20%. With their loans from Furuz increasing their income, they have been able to offset these losses, helping them to avoid falling back into poverty.
• This additional revenue has enabled 40% of farmers to buy livestock that they can sell on if necessary; more than a third have built up savings to safeguard against unexpected problems.

Furuz’s financial services and its ability to offer products suited to the needs of smallholder farmers have created a genuinely virtuous circle that’s improving the living conditions of the farmers and their families.

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Alterfin’s financing

Alterfin has provided financing to support the development of Furuz’s activity since 2018:

“When we received the loan from Alterfin, Tajikistan was experiencing a major economic crisis. Some lenders left. We couldn’t find a viable alternative for our financing. Alterfin arrived at just the right time, enabling us to keep going with peace of mind. What’s more, once we received our loan from Alterfin, other investors followed suit.”

Furuz’s partnership with Alterfin has given it more visibility and credibility in the eyes of other international lenders. Moreover, these lenders have matched Alterfin’s conditions, which are more favorable than those offered locally and by international organizations. Thanks to these more favorable loans, Furuz has been able to support more Tajik farmers with lower interest rates.

Listening to Furuz’s clients to confirm our impact

To understand Furuz’s impact on its beneficiaries in the agricultural industry and Alterfin’s role as a social investor, we interviewed 300 producers who received financing from Furuz last season. Want to know all about it? Read the case study in our annual report: