TASHKENT

Uzbekistan’s second-largest and oldest bank, Sanoat Qurilish Bank (SQB), and the Asian Development Bank (ADB) signed a revolving credit facility agreement, under which the ADB’s Trade and Supply Chain Finance Program (TSCFP) will provide up to $16.6 million to support SQB’s trade finance transactions.

The revolving credit facility will enhance SQB’s capacity to provide trade-related loans to its clients, including to its fast-growing base of small and medium-sized enterprises. Trade finance involves short-duration loans and guarantees, which means the amount of the revolving credit may be used multiple times a year.

The agreement was signed during the Uzbekistan Economic Forum, where Deputy Prime Minister Jamshid Kuchkarov announced that SQB would be the second Uzbek bank to be privatised in the coming years. According to the government privatisation programme, SQB, also known as Uzpromstorybank, is to be turned over to private hands by 2023.

“SQB has been ADB’s partner since 2013, and its mission to support trade is also an important focus for ADB,” said ADB Vice-President Shixin Chen. “This new agreement will provide additional access to finance especially for small businesses in Uzbekistan, further supporting their growth as well as the country’s overall economic development.”

TSCFP partners with eight banks in Uzbekistan and has supported about $2 billion in trade through 707  transactions as of July 2021. Of this amount, 61 percent was co-financed by the private sector. This co-financing leverages ADB resources to help the bank’s developing member-countries grow their exports and create more jobs.

“We are pleased to be at the forefront of providing much-needed trade finance products to our corporates and small and medium-sized enterprise clients. It will not only diversify and strengthen our client base, but also serve our purpose to contribute to Uzbekistan’s sustainable economic growth,” said SQB’s Deputy Chairman of the Board Bakhtiyor Rakhmatov.

Earlier this year, Uzbekistan’s Finance Ministry and the European Bank for Reconstruction and Development (EBRD) signed an agreement under which the EBRD will take part in the pre-privatisation process of Uzbekistan’s SQB by providing a $50 million credit line and eventually become one of the bank’s shareholders.

During the transformation process, the loan will be converted into the authorised capital of the bank and, as a result, the EBRD will become a shareholder of the SQB, the ministry said.