In a move aimed at fostering economic growth and supporting small enterprises, Uzbekistan has announced the allocation of $1.7bn to aid small businesses over the next three years. The initiative, outlined in the presidential decree on financial and institutional support measures for small business development, signifies a comprehensive effort to stimulate entrepreneurial activity and job creation.
To facilitate the program's implementation from 2023 to 2026, a total of UZS 6 trillion ($488mn) from the state budget and $1.2bn from international financial institutions will be dedicated to the development of small businesses in the country.
The Ministry of Economy and Finance, in collaboration with the "Business Development Bank," will spearhead the ambitious program "Continuous Support of Small Business" starting from October 1, 2023.
Eligible participants include individual entrepreneurs with at least one year of operation, farms, self-employed individuals, craftsmen, homemakers, non-state educational organizations, and small business entities providing permanent employment to three or more people. Legal entities and individuals with a positive credit history, having successfully implemented business projects within family entrepreneurship programs, are also eligible.
Key features of the program, effective from October 1, 2023, include:
Financial Support Measures:
- Loans up to UZS 1.5bn ($122,040) for the establishment or expansion of businesses for up to 2 years, with a preferential repayment period of up to 7 years.
- Revolving funds for a period of up to 3 years at an interest rate of 4% points higher than the annual Central Bank base rate.
- Leasing options for the purchase of fixed assets.
- Possibility of allocating collateral-free loans up to UZS 100 mn ($8,136), and loans up to UZS 150mn ($12,204) with a collateral requirement reduced by up to 50%.
- Installment-based lending for fixed assets worth up to UZB 1.5bn ($122,040) over 7 years.
- Shareholder opportunities for small businesses expanding existing production.
For eligible small businesses involved in new or expanded projects, becoming a shareholder is facilitated, allowing ownership of state-owned objects and land areas, equipment, buildings, and other tangible assets, not exceeding 20% or UZS 1bn ($81,360).
In addition, the initiative supports the commercialization of innovative developments, allocating grant funds of up to UZS 2bn ($162,721) within the framework of state scientific programs, particularly targeting high-tech start-up projects.
In the realm of consultative support, the initiative addresses various aspects, including obtaining licenses, permits, and certificates, navigating customs and tax administration, facilitating export and import operations, and aiding in contract formulation. It also extends support for participating in state procurement, as well as the acquisition or leasing of land plots and buildings for construction. Information and guidance regarding existing benefits, preferences, and additional opportunities to support entrepreneurship will be provided.
To streamline these processes, the Business Development Bank is tasked with launching a Business Portal within three months. This portal will automate and coordinate business operations, leveraging technical support from international financial institutions and other funding sources.
To enhance accessibility and coordination, the Business Development Bank will launch a Business Portal within three months, utilizing technical support from international financial institutions and other sources. This portal is expected to streamline various aspects of small business operations, providing a centralized platform for entrepreneurs.
With this substantial financial injection and a holistic support framework, Uzbekistan aims to create a conducive environment for small businesses to thrive, contribute to economic development, and generate employment opportunities.
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