The credits to small business via four financial institutions – Davr Bank, Hamkorbank, Ipak Yuli Bank and leasing company UzbekLeasing International A.O.

Aliya Mukhamedyarova, Financial Sector Specialist in ADB’s Central and West Asia Department, said that small businesses contribute over 50% of Uzbekistan’s GDP and 80% of employment but their access to finance, particularly in rural areas, is hampered by limited services and a range of other obstacles.

“This loan will allow the participating financial institutions to extend finance for working capital and fixed asset investment to small businesses, particularly outside the capital and for businesses run by women, giving a shot in the arm to job creation and the wider economy,” she added.

The funds will be lent to small businesses at market-based rates. To ensure the participating financial institutions can service a larger range of businesses, the maximum single subloan amount has been set at US$300,000.

In addition, to ensure a broad gender and geographical spread, the project aims to extend at least 20% of all eligible loans to women-owned businesses, and at least 60% to small businesses outside the capital.

A technical assistance grant of US$500,000 will be financed by the Government of Luxembourg, through the Financial Sector Development Partnership Special Fund and administered by ADB.

It will strengthen the policies and procedures of the participating financial institutions, raising their capability for small business lending. Stepped-up financial literacy programs for their small business clients will also be provided.

The project will be implemented over 5 years with an estimated completion date of end December 2021.