The Asian Development Bank (ADB) today approved a $100 million policy-based loan to help Uzbekistan undertake reforms to improve the enabling environment for small and medium-sized enterprises (SMEs) in the country. The loan will finance the first subprogram of ADB’s Small and Medium-Sized Enterprises Development Program and includes the equivalent of $20 million denominated in local currency, the Uzbekistan sum.
“Uzbekistan continues to accelerate its transition towards a market-based economy and SMEs have made a substantial contribution toward economic growth and jobs in the country,” said ADB Director General for Central and West Asia Yevgeniy Zhukov. “This program builds on ADB’s long-standing support for SMEs in Uzbekistan and will help to improve the enabling environment for these businesses, allowing them to become drivers of private sector-led diversified growth.”
SMEs in Uzbekistan account for over half of the gross domestic product and provide about two-thirds of formal and informal jobs. Nearly half a million SMEs are operational although many were affected by the coronavirus disease (COVID-19) pandemic, particularly in the tourism and hospitality industries.
ADB’s Small and Medium-Sized Enterprises Development Program comprises two subprograms and aims to help develop a more efficient operating and commercial environment for SMEs. Under the first subprogram, reforms include diversifying the financial instruments available to help expand the operations of credit-constrained SMEs and reducing the number of permits and licenses that they are required to obtain. These reforms and others, such as reducing trade transaction costs and increasing digitalization, are expected to help generate about 13,500 jobs.
“Uzbekistan’s post-COVID-19 economic recovery and sustained economic growth is dependent on the performance of SMEs,” said ADB Senior Financial Sector Specialist Priyanka Sood. “ADB’s program will help pave the way for their development, encourage innovation, and increase their resilience to future economic shocks.”
ADB will also provide a $250,000 technical assistance grant to help government agencies enact the reforms under the program, including through the introduction of digital solutions for SMEs.
Since Uzbekistan joined ADB in 1995, the bank has committed loans, grants, and technical assistance of more than $10 billion to support the country’s development.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.