The Asian Development Bank (ADB) has approved a $100 million policy-based loan to support small and medium-sized enterprises (SMEs) in Uzbekistan and spur economic growth in the Central Asian nation.
ADB’s Small and Medium-Sized Enterprises Development Program will help strengthen the operating environment for SMEs to drive private sector development-led economic growth and also increase their resilience to future economic shocks like the one triggered by the COVID-19 pandemic. This is the second subprogram under the program, and it builds on the policy, regulatory, and institutional reforms implemented by the government under the first subprogram.
“The program enables systematic reforms assisted under ADB’s continuing support for SMEs in Uzbekistan,” said ADB Director General for Central and West Asia Yevgeniy Zhukov. “As the country continues implementation of 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 value-added formal employment.”
ADB’s program will support the Government of Uzbekistan in comprehensively addressing the key challenges faced by SMEs in accessing finance. These challenges stem from the limited access to more diverse forms of finance necessary for different stages of their development in a bank-dominated financial sector with high interest rates and high collateral requirements. The program will help simplify regulatory and administrative burdens that add to the cost of doing business and disproportionately impact women’s businesses. It will help improve SMEs’ trade competitiveness through the diversification of export products and markets and digitalization-enabled higher productivity. It will also support market-based skills development, especially for women and youth to increase their employability.
“Measures implemented under the program will incentivize the growth and formalization of SMEs and in turn contribute to expanding the tax base and domestic resource mobilization,” said ADB Principal Private Sector Development Specialist Priyanka Sood.
