TASHKENT

The Asian Development Bank (ADB) has approved a $100 million loan to help Uzbekistan to support small and medium-sized enterprises and it includes the equivalent of $20 million denominated in Uzbek national currency, the lender said.

The ADB’s policy-based loan will help Uzbekistan to undertake reforms to improve the enabling environment for small and medium-sized enterprises (SMEs) in the country. The loan will finance the first subprogramme of the ADB’s Small and Medium-Sized Enterprises Development Programme.

“Uzbekistan continues to accelerate its transition towards a market-based economy and SMEs have made a substantial contribution toward economic growth and jobs in the country,” Yevgeniy Zhukov, the ADB Director General for Central and West Asi, said.

“This programme builds on the ADB’s long-standing support for SMEs in Uzbekistan and will help to improve the enabling environment for these businesses, allowing them to become drivers of private sector-led diversified growth,” he said.

According to the ADB, SMEs in Uzbekistan account for over half of the gross domestic product (GDP) and provide about two-thirds of formal and informal jobs. Nearly half a million SMEs are operational although many were affected by the coronavirus pandemic, particularly in the tourism and hospitality industries.

The ADB’s Small and Medium-Sized Enterprises Development Programme comprises two subprogrammes and aims to help develop a more efficient operating and commercial environment for SMEs. Under the first subprogramme, reforms include diversifying the financial instruments available to help expand the operations of credit-constrained SMEs and reducing the number of permits and licenses that they are required to obtain. These reforms and others, such as reducing trade transaction costs and increasing digitalization, are expected to help generate about 13,500 jobs.

“Uzbekistan’s post-COVID-19 economic recovery and sustained economic growth is dependent on the performance of SMEs,” Priyanka Sood, the ADB Senior Financial Sector Specialist, said. “The ADB’s programme will help pave the way for their development, encourage innovation, and increase their resilience to future economic shocks.”

ADB will also provide a $250,000 technical assistance grant to help government agencies enact the reforms under the programme, including through the introduction of digital solutions for SMEs.

In October, the ADB approved a $100 million policy-based loan to support policy, regulatory, and institutional reforms needed to create an enabling environment for competitive financial markets in Uzbekistan.

Uzbekistan joined the ADB in 1995. Since then, the bank has committed loans, grants, and technical assistance amounting to $10.1 billion for the country.