Businesses in Uzbekistan will soon be able to obtain collateral-free loans of up to 5 billion soums. At today’s government meeting on advancing poverty reduction and income growth efforts, President Shavkat Mirziyoyev sharply criticized the project-management skills of neighborhood-level bankers and assistants to local mayors.
Officials noted that most of these local bankers and assistants don't understand who actually needs credit or which financing mechanism — leasing, factoring, guarantees, insurance, working capital, or contract-based financing — best fits a given project.
Mirziyoyev criticized bankers and mayors’ assistants for continuing to ask "Do you have any collateral?" as their first question, rather than first evaluating the viability of a project.
The meeting also highlighted persistent bureaucratic obstacles in allocating credit to businesses, along with repayment schedules that fail to account for the nature of different businesses. Officials stressed the need to tailor loan repayment terms to the specific realities of farming, trade, and other business sectors.
Authority over preferential credit resources for family and youth businesseship will be transferred to district-level task forces. These district task forces will independently decide who receives credit and how much, whether funds are disbursed in cash or non-cash form, whether repayment terms should be extended, and how payment schedules should be adjusted to fit different types of businesses.
Responsibility for inclusive financing issues will also shift to these district task forces.
Officials noted that 1.37 trillion soums is currently allocated for family businesses and 450 billion soums for youth businesseship. District task forces will be empowered to make independent financing decisions based on local conditions and project effectiveness.
Under the new framework, an entrepreneur who partners with 10 families in a cooperative arrangement will be eligible for a collateral-free loan of up to 500 million soums, while one who organizes cooperation among 100 families can access up to 5 billion soums without collateral.
The meeting noted that poverty levels have declined and the number of people in need has decreased, but that some officials have failed to make sufficient progress in transforming their neighborhoods into areas free of unemployment and poverty. Mirziyoyev criticized certain regional leaders for lacking the knowledge or persistence needed to help residents find work. He announced that Uzbekistan will introduce a new system for tackling poverty, under which mayors will be required to dedicate three days a week to employment and poverty-related issues.
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