Today President of Uzbekistan Shavkat Mirziyoyev signed a resolution “On establishment of the State Fund for Support of Business Development”.

The state fund is created in the form of a state institution. The Fund will provide resources to commercial banks, including through attracted foreign credit lines, for subsequent lending to small businesses.

The new fund will provide guarantees to small business entities on loans of commercial banks at the volume of up to 50% of the loan amount, but not more than US$500,000 or equivalent.

According to the resolution, the fund will also provide compensation to cover interest expenses on loans of commercial banks, amount of which shall not exceed US$1.0 million in equivalent:

• in national currency, with an interest rate not exceeding the refinancing rate - in the amount of up to 40 percent of the refinancing rate of the Central Bank of the Republic of Uzbekistan;
• in foreign currency - up to 40 percent of the interest rate set by commercial banks, but not more than 3 percentage points.

Financial support of small business entities and provision of commercial banks with resources is carried out by the Fund, both in national and foreign currency through commercial banks, on the basis of general agreements.

The resolution said that the resources of the Fund will be created on initial contribution from the Guarantee Fund of Small Industrial Zones in Tashkent city and the Guarantee Fund for Small Business Development at the volume of US$50 million and 100 billion soums respectively, as well as the state budget funds for 100 billion soums.

The Central Bank of Uzbekistan will direct a part of its annual net profit, forwarded to the State Budget of the Republic of Uzbekistan, to formation of the resources of the new fund.

The resource base of the fund will also be formed due to loans and grants from international financial institutions, foreign government organizations and other donors, fund’s own revenues and other sources.

The President instructed the Ministry of Finance to provide, starting from 2018, funds from the State Budget of the Republic of Uzbekistan to replenish the Fund’s resource base annually.

The document noted that the Fund will provide guarantees and compensations for commercial bank loans, as well as resources for commercial banks to finance the implementation of projects:

• in agriculture, primarily aimed at creating modern energy-efficient greenhouses, development of livestock, poultry, fisheries, rabbit breeding, beekeeping, viticulture and horticulture, including intensive gardens;
• in the sphere of processing agricultural products, creating an infrastructure for storage of fruit and vegetable products and logistics centers associated with its transportation;
• on arrangement and repair of common areas in multi-apartment houses, carried out by private owners’ associations and management companies;
• in other areas of entrepreneurial activity, determined by the Cabinet of Ministers of the Republic of Uzbekistan.

Uzbek leader released the Fund from paying all kinds of taxes and mandatory deductions to state funds, with the targeted direction of the released funds to strengthening its resource and material and technical base.