The Component strengthens the capacity of existing micro-finance institutions to provide financial services to target beneficiaries. Also, the project strengthens capacity of financial institutions through support in developing business strategies, basic operation systems, training and support for expansion of operations.

In addition, the Component supports the development of ‘western style’ agricultural cooperatives in Namangan region. In order to encourage the establishment of new small and medium enterprises (as distinct from subsistence micro-enterprises) in Namangan region, a further initiative on a pilot basis is being developed to assist existing small scale agricultural producers to achieve greater economies of scale through collective purchasing, production and marketing arrangements, thus ensuring a greater share of total profits generated in agricultural supply chains.