16 November 2023

Business Development Bank will raise more than $1 billion to support small companies

State structures for business support plan to place Eurobonds worth $600 million, Spot reports, citing the National News Agency of Uzbekistan.

The Decree “On additional measures to attract the population to small and medium-sized businesses” sets out targets for the Business Development Bank and the Entrepreneurship Development Company until the end of 2026.

According to available information, it is planned to issue BDB bonds worth $300 million and Entrepreneurship Development Company bonds in the same volume on international markets.

The BDB will also have to attract $800 million in lending resources from international institutional investors to support small businesses. Due to this, it is planned to increase the balance of loans allocated to small businesses by 1.7 times.

Thanks to this, the share of small businesses in the loan portfolio should increase from the current 28% to 43%. Over the next three years, it is planned to organize or expand the activities of 150 thousand business entities with the participation of the BDB.

In turn, the Entrepreneurship Development Company will have to provide equity financing to 150 medium-sized enterprises. Another 300 projects are expected to be sold to businesses under the “service mortgage” program.

Due to these measures, it is planned to increase the number of medium-level enterprises by 2.5 times. The total volume of financial services for small and medium-sized businesses should increase by 75% – from 8 trillion to 14 trillion soums.

The Business Development Bank was created on the basis of the Qishloq Qurilish Bank in accordance with the presidential decree of September 4. As the head of state stated at a dialogue with entrepreneurs in August, the credit institution will focus on supporting commercial enterprises.

The BDB also establishes a Small Business Development Fund with assistance centers for small businesses in all regions of Uzbekistan. As part of the program of financial and institutional support for small businesses, the authorized capital of the BDB will be increased to 3 trillion soums.

Last week, the President decided to transform the State Fund for the Support of Entrepreneurship into an Entrepreneurship Development Company. It will be provided with 1.2 trillion soums from the budget, and will also attract $100 million from international organizations.