In line with the presidential decree aimed at enhancing the financial support system for small and medium-sized enterprises (SMEs), the State Fund for Entrepreneurship Support, known as the "Entrepreneurship Development Company," has undergone a reorganization.
This transformation introduces new tools to bolster business support and extends the range of assistance available. Notably, the company now offers guarantees for loans, leases, bank guarantees, and letters of credit ranging from UZS 500mn ($40,666) to UZS 5bn ($406,669) for entrepreneurs engaged in small and medium-sized businesses, both in national and foreign currency.
This decree signifies a notable shift in three key aspects:
- Guarantees were traditionally limited to small entrepreneurs, but now, even medium-sized businesses can benefit from such assurances.
- The scope of guarantees was previously confined to loans in the national currency; now, foreign currency loans are also covered.
- The maximum guaranteed amount has been doubled from UZS 2.5bn ($203,334) to UZS 5bn ($406,669).
For instance, if a textile industry entrepreneur is seeking a loan in foreign currency equivalent to UZS 5bn ($406,669) for purchasing raw materials internationally. Previously, obtaining such a loan required a guarantor, posing a considerable challenge. However, with the president's decree, this entrepreneur can now secure a guarantee for the foreign currency loan from the reorganized company, significantly easing the process.
The twofold increase in the amount of guaranteed loans is expected to incentivize small businesses to transition into medium-sized enterprises, fostering overall economic growth. Moreover, the decree introduces the provision of repeated guarantees for additional loans to entrepreneurs with a solid credit history, a departure from the previous practice of providing guarantees for only one loan. Additionally, the implementation of portfolio guarantees streamlines the process, reducing the time required to obtain the company's guarantee to just seven days.
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