Tashkent, Uzbekistan (UzDaily.com) — The government of Uzbekistan is launching a large-scale project aimed at strengthening the financial sustainability of small and medium-sized businesses (SMBs) with the support of the Islamic Development Bank (IsDB). This is outlined in a decree issued by the Cabinet of Ministers on December 30, 2024.

According to the agreement signed in April 2024, the IsDB will allocate US$30 million to the project, while the Islamic Solidarity Fund for Development (ISFD), a part of the bank, will contribute an additional US$10 million. The total funding allocated for the program is US$40 million.

Of the total, US$30 million will be directed towards supporting small businesses using the Murabaha financing principle (an Islamic financial instrument). Additionally, US$7.5 million will go to the Trade Development Company to provide credit guarantees.

Another US$1.75 million will be used for business engineering programs and enhancing the capacity of entrepreneurs.

The remaining funds will be allocated for project management, audits, and establishing a contingency reserve for unforeseen expenses.

The funds will be provided for a period of 10 years, including a 3-year grace period. The additional loan costs will be based on the 10-year average swap rate plus 1.85%.

The program’s goal is to support and develop small businesses, improve their financial resilience, and strengthen the entrepreneurial sector in Uzbekistan.

The program will be implemented from 2025 to 2027, with plans to raise up to US$100 million from various sources of funding.

This project is part of the government’s broader strategy to stimulate entrepreneurial activity and ensure sustainable economic growth.