MICROCAPITAL BRIEF: Uzbekistan’s Hamkor Bank to Launch Islamic Microfinance

The nonprofit AlHuda Center for Islamic Banking and Economics (CIBE) has signed an agreement with Hamkor Bank, a provider of microfinance services in Uzbekistan, to provide advisory services on Islamic microfinance and human capital development. Islamic microfinance models comply with Islamic law, the Shariah, which prohibits interest payments and fees, by way of concepts such as joint venture and profit sharing.

For the year 2011, Hamkor Bank reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 290 million, a gross loan portfolio of USD 161 million, deposits of USD 195 million and approximately 22,000 active borrowers. The number of depositors is not available. Hamkor Bank classifies 41 percent of its operations as microfinance.

By Brendan Millan, Research Associate

About AlHuda Center for Islamic Banking and Economics (CIBE)

Located in Pakistan, AlHuda CIBE is a nonprofit organization that specializes in research, training, consulting in the Islamic microfinance industry. The organization also provides technical assistance in the area of Shariah law, organizes distance learning programs and publishes a monthly newsletter on Islamic microfinance. Financial information for AlHuda CIBE is not available.

About Hamkor Bank

Established in 1991, Hamkor Bank is a registered joint-stock commercial bank in Uzbekistan. The bank aims to provide access to credit to any customer or business, “regardless of their type of activity and size of business.” For the year 2011, Hamkor Bank reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 290 million, a gross loan portfolio of USD 161 million, deposits of USD 195 million and approximately 22,000 active borrowers. The number of depositors is not available. Hamkor Bank classifies 41 percent of its operations as microfinance.

Sources and Additional Resources:

[1] AlHuda Centre of Islamic Banking and Economics: “Press Release: First Initiative to launch Islamic Banking in Uzbekistan”, correspondence with MicroCapital.

MicroCapital.org story, January 31, 2013, “AlHuda Center for Islamic Banking and Economics, VisionFund AzerCredit to Conduct Market Research in Advance of Possible Launch of Islamic Microfinance in Azerbaijan”, https://www.microcapital.org/microcapital-brief-alhuda-center-for-islamic-banking-and-economics-visionfund-azercredit-to-conduct-market-research-in-advance-of-possible-launch-of-islamic-microfinance-in-azerbaijan/

MicroCapital.org story, November 2, 2012, “Absolute Dual Return-Vision Microfinance Fund Invests $3.2m in FINCA Russia, AzerCredit of Azerbaijan, Bank Constanta of Georgia, Mikrofin of Bosnia and Herzegovina”, https://www.microcapital.org/microcapital-brief-absolute-dual-return-vision-microfinance-fund-invests-3-2m-in-finca-russia-azercredit-of-azerbaijan-bank-constanta-of-georgia-mikrofin-of-bosnia-and-herzegovina/

MicroCapital.org story, April 27, 2010, “Asian Development Bank Announces $50m Loan for Three Commercial Banks in Uzbekistan, Ipak Yuli Bank, HamkorBank and Agrobank, to Expand Financing to Micro- and Small Enterprises (MSEs)”, https://www.microcapital.org/microcapital-brief-asian-development-bank-announces-50m-loan-for-three-commercial-banks-in-uzbekistan-ipak-yuli-bank-hamkorbank-and-agrobank-to-expand-financing-to-micro-and-small-enterprises-m/

MicroCapital Universe Profile: AlHuda Center for Islamic Banking and Economics (CIBE), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=AlHuda+CIBE

MicroCapital Universe Profile: Hamkor Bank, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=HamkorBank

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