The Asian Development Bank (ADB) has approved a $100 million policy-based loan to support small and medium-sized enterprises (SMEs) in Uzbekistan and stimulate economic growth in this Central Asian country.
ADB’s Small and Medium-sized Enterprise Development Program will help strengthen the business environment for SMEs to stimulate private sector-driven economic growth, as well as increase their resilience to future economic shocks such as that caused by the COVID-19 pandemic. This is the second subprogram within the framework of the program, and it is based on the political, regulatory and institutional reforms implemented by the Government under the first subprogram.
“The program allows for systematic reforms, which is facilitated by ADB’s continued support for small and medium-sized enterprises in Uzbekistan,” said Evgeny Zhukov, ADB Director General for Central and West Asia. “As the country continues to implement key structural reforms to transition from a state-owned economy to a market economy with a prudent overall macroeconomic stance, SMEs will play a significant role in accelerating diversified economic growth, productivity and formal value-added employment.”
The ADB program will support the Government of Uzbekistan in comprehensively addressing the main challenges faced by SMEs in terms of access to finance. These problems stem from limited access to more diverse forms of financing needed for various stages of their development in a financial sector dominated by banks, with high interest rates and high collateral requirements. The program will help to simplify the regulatory and administrative burden, which increases the cost of doing business and disproportionately affects women’s businesses. This will help to increase the trade competitiveness of SMEs by diversifying export products and markets, as well as increasing productivity through digitalization. It will also support the development of market-appropriate skills, especially for women and youth, to enhance their employment opportunities.
“The measures implemented under the program will stimulate the growth and formalization of SMEs and, in turn, will contribute to expanding the tax base and mobilizing domestic resources,” said Priyanka Soud, ADB’s Chief Specialist for Private Sector Development.
Uzbekistan joined the ADB in 1995. Since then, the bank has provided loans, grants and technical assistance to the country in the amount of USD 10.8 billion.
ADB is committed to achieving a prosperous, inclusive, stable and sustainable Asia and the Pacific, while continuing its efforts to eradicate extreme poverty. ADB was founded in 1966, its members are 68 countries, 49 of which are located in the region.
Source: The Asian Development Bank