Julia Eckert, Georg Elwert (1996):
Land Tenure in Uzbekistan

3.4 Credits

In order to support the foundings of private farms the government has granted unlimited credit for private farmers. [FN 106] The "Tadbirkor" bank was founded to manage agricultural credits. It offers short and medium term credits officially at the rate of 50 % to farmers with at least 30 units of live stock, and at 90 % for other farmers. This interest rate is lower than the current rate of inflation. Those we interviewed did not pay the official rates but higher rates more close to the rate of inflation or well above it. Rates varied between 100 and 200 %. [FN 107] People who had no credit also said they knew of interest rates of up to 200 %. [FN 108] "Some time ago there were credits for farmers. Nowadays there are no credits for farmers anymore because of the high inflation." Many farmers therefore did not apply for credit at the bank but borrowed money privately of relatives and friends. Often, though, private loans were for the lack of capital, too small to fund larger investments. [FN 109] We could not determine how the discrepancy between official rates and rates paid came about. There also was no awareness of this discrepancy on the side of the concerned.

Private farmers do not get their credit directly from the bank although they have a bank account. They can apply for a credit at the Hokhimiat. The Hokhimiat, the association of Dehkhan farmers and the bank examine the application. If the credit is granted, the contract will be between the Hokhimiat and the farmer, not directly between the farmer and the bank. At least this is how it was handled in the cases observed. The Hokhimiat acts as security towards the bank. Additional collaterals are items of value like houses, animals, cars and watches. If a loan was not paid back, part of the land would be taken over by the Hokhimiat and the bank. But the administration was not certain how such cases would be handled since they had not occurred so far.

Leaseholders in the Shirkat system could not obtain a loan individually. They were not entitled to a bank account. Only the Shirkat could take up a loan. It would then in turn lend the money to the tenant and act as a security to the bank.