Uzbekistan Commits $11.6 Billion to Boost Small and Medium-Sized Enterprises with Preferential Loans

Uzbekistan Unveils Major SME Funding Initiative

Uzbekistan has announced a substantial allocation of $11.6 billion, equivalent to 140 trillion soums, dedicated to bolstering the nation's small and medium-sized enterprises (SMEs). President Shavkat Mirziyoyev revealed the comprehensive program, which includes provisions for lower interest rates, designed to stimulate business development and foster economic growth across the Central Asian republic.

The initiative underscores the government's commitment to strengthening the private sector, which is a critical driver of employment and economic diversification. The funds are expected to facilitate easier access to finance for entrepreneurs, enabling them to expand operations, innovate, and contribute more significantly to the national economy.

Targeted Loan Programs and Reduced Interest Rates

A key component of the new program is the introduction of preferential loan conditions tailored to various business needs and geographical areas. While the general loan interest rate stands at 17.5%, President Mirziyoyev highlighted that loans would be offered at a reduced rate of 12% in 37 'difficult' districts, acknowledging differing economic conditions across regions.

Specific loan categories and their maximum amounts include:

• Concessional loans for family businesses will see an increase, reaching up to 50 million soums (approximately $4,135).
• Entrepreneurs looking to purchase imported goods or certified pedigree livestock can access loans of up to 100 million soums (approximately $8,270).
• For those establishing mini-hotels or acquiring freezers and equipment for storage and processing, loans of up to 150 million soums (approximately $12,400) are available.
• Businesses operating in border and enclave areas will benefit from significantly higher loan limits, increasing to 1 billion soums (approximately $82,700). An additional 2 trillion soums ($165 million) has been allocated for these regions, supplementing the previously planned 3.6 trillion soums ($298 million).

Furthermore, interest rates on loans provided to women entrepreneurs will be reduced by 2%, a measure aimed at appreciating their role in managing businesses alongside household responsibilities. Unsecured loans of up to 150 million UZS are also available for microenterprises expanding into small businesses or small businesses growing into medium-sized companies, provided they have no outstanding overdue loans.

Economic Impact and Future Goals

The extensive funding initiative is part of a broader strategy to enhance the role of SMEs in Uzbekistan's economy. The government has set ambitious targets, including increasing the share of small and medium-sized businesses in the country's GDP to 55% and creating 70 billion USD in added value.

Other key objectives include boosting SME exports from 9 billion to 12 billion USD, generating 1.5 million permanent jobs to raise the employment share in the sector to 75%, and increasing the number of enterprises with over 100 employees from 2,600 to 4,000. The program also aims to develop 100 new national brands and launch at least 200 startups in promising sectors such as AI, blockchain, big data, green technologies, and energy saving. Banks are also expected to provide an additional 17 trillion soums ($1.4 billion) to deepen district specialization, with 4% of these loans directed towards production and 6% towards processing.