On 19 April, the President of the Republic of Uzbekistan adopted a Resolution “On measures to further expand the mechanisms for financing entrepreneurial projects in the regions”, which served as an additional incentive for small and medium-sized businesses.
According to the document, commercial banks of the republic are provided with a credit line in the equivalent of US$300 million at the expense of the Fund for Reconstruction and Development – to finance the activities of small businesses.
Any entrepreneur can get a loan, however, its size depends on the time of the enterprise.
less than 6 months – up to 1 billion soums;
6-12 months – up to 2 billion soums;
1-2 years – up to 3 billion soums;
2-3 years – up to 4 billion soums;
over 3 years – up to 5 billion soums.
A soft loan is allocated for all projects in the field of production and provision of services, but there are restrictions. Within the framework of this initiative, loans are not available to initiators of projects in the field of construction, trade, intermediary activities, manufacturers of excisable goods, in addition, to state-owned enterprises and legal entities with a state share in the authorized capital, as well as to replenish working capital.
On the other hand, entities that meet the criteria will be able to receive a loan at 14% per annum for 5 years (including a 2-year grace period).
It is important to note a significant innovation – at least 70 percent of the loan will be allocated to those entrepreneurs who carry out their business in the territory outside the city of Nukus, administrative centers of regions and cities of regional subordination. Thus, the development of business and infrastructure, the creation of jobs in rural areas is stimulated.
The Ministry of Investments and Foreign Trade, which is entrusted with coordinating the effective use of the credit line allocated under this document, is carrying out a number of tasks to implement its provisions. In particular, work is underway to ensure the distribution of credit line resources by regions and commercial banks based on needs, measures are being taken to develop high-quality design and pre-project documentation by project factories and local groups in cooperation with commercial banks. A mechanism is also being introduced to carry out systematic monitoring of the effective and targeted use of the credit line by all participants in the process.
To prevent various kinds of delays, the document provides for the placement of resources requested by banks within three days after receipt of applications.
As expected, as a result of the implementation of investment projects financed under this Decree of the Head of State, new jobs will be created – mainly in rural areas of the republic, the introduction of innovations and new technologies will be activated, new modern production facilities will be launched.