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Remittance Link Housing Improvement Loans by Loucine Hayes Tajikistan at a Glance Poverty rate – according to WB 64% of the population live below the poverty line/ on less than $ 2,15 a day. Unemployment - 30% of the economically active population

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tajikistan at a glance
Tajikistan at a Glance
  • Poverty rate – according to WB 64% of the population live below the poverty line/ on less than $ 2,15 a day.
  • Unemployment -30% of the economically active population
  • Labor migration -over 1.5 million Tajiks migrate in search of work abroad/ mainly Russia
  • Remittances comprise 36,2% of overall GDP in Tajikistan
  • Inflows - 1 billion USD yearly to Tajikistan in remittances
  • Pilot site - 50% of male workers migrate from Rasht valley yearly to look for job in Russia, 60% of household income is comprised of remittances
project overview
Project overview


Habitat for Humanity Tajikistan

First Micro-finance Bank Tajikistan


Added value in partnership:

Product development


Financial education


Home Improvement Loan for low income rural clients, linked to an affordable and sustainable remittance service (under development)

Decision making: Joint Credit Committee


Product development: IFAD funding

Loan Capital: FMFB

Added services: HFHT


The goal

Promote formal savings and investment practices for the remittance money to be effectively used towards home improvement projects intended to advance the quality of life of the Target Group.


The objectives

  • Advance remittance linked products and raise their rate of accessibility and use by low-income familiesin rural areas.
  • 2.Enhance financial literacy and capacity by building family savings, credit history, andeffective investment of remittances.
  • 3.Implement an innovative financial housing product tied to remittances, through a pilot project, and subsequently to expand to other regions.
  • 4.Share organizational learningand expertise .
  • 5.Increase awareness of the Government and relevant Ministries and institutions tocreate a stable platform and a favourable environment that highlights the importance of remittances for low-income families.

Feasibility study and product design

Remittance linked housing loan product in 3 rural communities

Financial education to target groups

Access to banking services via efficient use of remittance funds

Financial product pilot in 3 communities

30 families served through remittance linked housing loan

Financial product and services modified, feasibility study for replication in progress

Monitoring and Evaluation, broader community involvement

Replication of the project in other regions

Feasibility study completed, marketing and FE in progress


The target group

  • Young males from 3 rural communities in Rasht, aged 25-45, working as migrant labourers in Russia, as remitters
  • Their families who receive remittances
  • The partners
  • HFHT has an ongoing presence in the target area implementing a housing project for 171 families representing 1362 individuals of which approximately 500 children in 11 rural communities
  • FMFB has a branch office in Rasht since 2007,transferred USD 679, 355 in remittances in 2006




Home Improvement Loans


Individual clients




HFHT has over 7 years of experience working with local communities in urban and rural areas and has run successfully a pilot Housing Microfinance project in partnership with FMFB using above model



Proposed product

  • Two stages in the new product, savings and the repayment
  • Savings stage will be used as an indicator of the client’s capacity to repay prior to disbursing the housing loan
  • The repayment stage will be seasonal and have the option to be paid on a monthly or bi‐monthly basis

Savings Stage:

• Mandatory $50 per month

• 6 Month Duration

• 5% annual interest (compounded monthly)

• The client will not be able to withdraw his/her savings or accumulated interest until the loan has been completely repaid


Remittances Model

Individual clients



Home Improvement Loans

Product Development


Financial Education



Repayment Stage

  • • Average Loan Balance: $2,355
  • • Collateral: movable and immovable property, dwelling undergoing reinforcement
  • • Seasonal repayment structure
  • High Season (May‐November): $150 / month
  • Low Season (December – April): $50 / month
  • • Client has the option to pay monthly ($50‐$150) or bi‐monthly ($100‐$300)
  • • Interest Rate of 25% per annum
  • In‐line with House Improvement Loan


Thank you