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There were no consumer financial institutions in Uzbekistan when the first credit unions opened their doors in 2002. But the former Soviet satellite nation, which gained its freedom in 1992, did have a number of agricultural cooperatives whose participants were used to sharing resources. That helped set the stage for the financial cooperatives.

But Uzbekistan also had a dedicated group of women who helped drive the creation of the country's first credit unions, remarkable considering the country is 88% Muslim. Assistance provided by the Credit Union Association of Oregon through the World Council of Credit Unions' Partners program helped make rapid growth possible in a country that never before served the financial needs of its population.

"They had no concept of credit unions, no concept of financial services for the general population," said Kasey Rockwell, CUAO's director of credit union advocacy. "Only businesses used financial institutions."

Under Communist Rule

As part of a Communist state, businesses were required to deposit their earnings in the government's central bank, then petition the government for withdrawals whenever it was time to pay bills or meet payrolls. When Uzbekistan became an independent nation 12 years ago, it had a great deal of economic catching up to do with the free world.

"Credit unions really are the first attempt to incorporate democratic principles into life in Uzbekistan," said Alison Carr, the association's director of education and training. "The first step was to get legislation passed to license credit unions in their country."

Understanding the credit union philosophy and operational concept was the purpose of the first visitors from Uzbekistan to Oregon in Oct. 2000. Elena Lee, WOCCU project specialist responsible for Uzbekistan, escorted Nizom Muradov, chief economist with the Central Bank of Uzbekistan and eventual regulator of credit unions there, to the association's Beaverton headquarters.

The pair steeped themselves in the history and development of the U.S. credit union movement. They studied credit union operations, the concept of voluntary boards, even credit union programs aimed at youth depositors, said Carr. The study provided the groundwork necessary to begin the process for creating a government act allowing the formation of credit unions in Uzbekistan.

"The government there had always had a strong centralized control over the financial process and we were told consumer financial institutions would never happen," said Carr.

The team gave itself two years to make the process work and found unusually strong allies in the women of Uzbekistan, who needed credit unions to provide financing for the start-up of small, women-owned businesses throughout the country.

Muradov's first visit, which also included a visit to Old West CU in rural John Day, Ore., helped launch the legislative development process, said Rockwell.

In June, 2001, a team of seven Uzbekistan financial professionals came to a three-week technical training session in Boulder, Colo., to learn about the operations and even the examination processes of credit unions in the U.S. The visitors, all from the Central Bank of Uzbekistan, learned how to write business plans and make loans. They visited area credit unions and watched teller transactions in process. They even performed their own examination on one Colorado credit union as a way to better understand the entire process, Carr said.

Meanwhile, WOCCU project staff members were in Uzbekistan, a country of 26 million that's the size of California, helping smooth the way for legislative development. And they were talking to women in the country, seeking support at the grassroots as well as government levels.

"When WOCCU goes into a country, they start small and build from there," said Carr. WOCCU wanted to target the development of three credit unions, each of which required $10,000 in U.S. funds to open their doors. WOCCU was able to meet those financial requirements, but participants were soon to find out that enthusiasm for the new movement went far beyond that small start.

Throughout much of 2002, the Uzbekistan government and its new credit union trainees spent much of the year crafting legislation, fitting the new institutions into the country's social structure and identifying staff needed to operate them. In the fall of 2002, the country's first credit unions received their licenses to operate. Today Uzbekistan has 14 such institutions, said Carr.

Traveling With Guards

"I felt very privileged to have been a part of making this happen," said Carr.

But the executive's role in the process was far from over. In March, 2003, Carr and Ralph Goodwin, chief executive officer of Old West Credit Union, traveled to Uzbekistan's capital of Tashkent for the official opening of the first three credit unions.

"The government considered this a diplomatic mission and we traveled with a cadre of guards to protect us wherever we went," said Carr.

This proved especially helpful on March 17, the first day of the U.S. war against Iraq. "There never was a time when we felt nervous," said Carr.

Carr was impressed with the warmth of the country's people, whom she describes as "Muslin moderates." Carr had anticipated a rural country, but instead was greeted with an attractive, progressive Eastern European capital filled with highly educated people eager to make the credit union concept work.

Carr and Goodwin met with John Herbst, the U.S. ambassador to Uzbekistan, who joined them in visiting Sherdor Savings and Credit Union, one of the newly opened institutions in the ancient city of Samarkand. The pair later met with R. Asimov, the country's deputy prime minister to reinforce how proud they all were to be part of the process.

The opening of the three credit unions involved a great deal of ceremony and the signing of official documents to solidify the continued pledge of support between WOCCU, CUOA and Uzbekistan's new credit union movement.

Support From Women

Government officials may have pledged their support, but it was the women of Uzbekistan who made the process happen, Carr said. That began in 1995 when Lucy Ito, then representing WOCCU to Eastern Europe, helped the country's business women launch micro enterprises as a way to promote economic democracy. Ito's visit had significant impact, said Carr.

"Among Uzbekistan's 14 credit unions, all of the board members and all but one of the chief executives are women," said Carr.

Three more Uzbekistan credit union officials visited the league in November. Central Bank official Davron Madiromov, who now works part-time for WOCCU, escorted several of Uzbekistan's female credit union leaders for an advanced lesson in CU operations.

Gulnora Makhmudova, board chair of Baraka Savings and Credit Union, and Larisa Yurikova, manager of Lostochka Savings and Credit Union, came to learn better ways to serve their members. Yurikova heads one of the growing number of Uzbekistan credit unions that raised its own $10,000 to qualify for a license to operate.

The pair had a lot to learn about credit union operations, Carr said, and a lot they could teach in return about dedication and commitment.

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