The Asian Development Bank (ADB) has greenlit a $100mn policy-based loan to fortify small and medium-sized enterprises (SMEs) in Uzbekistan, aiming to catalyze economic expansion in the Central Asian nation.
This initiative, part of ADB's Small and Medium-Sized Enterprises Development Program, seeks to enhance the operational landscape for SMEs, fostering private sector-led economic growth and fortifying resilience against economic shocks, such as those induced by the COVID-19 pandemic.
The program, now in its second subprogram iteration, builds upon the policy, regulatory, and institutional reforms instituted by the Uzbekistan government in the initial subprogram.
Yevgeniy Zhukov, ADB Director General for Central and West Asia, highlighted the program's role in supporting systematic reforms for SMEs in Uzbekistan. "As the country continues implementation of key structural reforms to transition from a state-owned economy to a market economy with a prudent overall macroeconomic stance, SMEs will play a significant role in accelerating diversified economic growth, productivity, and value-added formal employment."
The ADB program aims to address pivotal challenges faced by Uzbekistan's SMEs, particularly in accessing finance. These challenges stem from limited access to diverse forms of finance needed for different developmental stages. The prevailing financial sector, dominated by banks with high-interest rates and stringent collateral requirements, poses obstacles for SMEs.
To overcome these hurdles, the program will streamline regulatory and administrative processes, reducing the cost of doing business. It will also focus on gender equality, alleviating the disproportionate impact of regulatory burdens on women's businesses. Additionally, the initiative aims to enhance SMEs' trade competitiveness by diversifying export products and markets, along with embracing digitalization to boost productivity. The program will also champion market-oriented skills development, especially targeting women and youth to enhance their employability.
Priyanka Sood, ADB Principal Private Sector Development Specialist, emphasized that the measures implemented under the program would stimulate SME growth and formalization, contributing to the expansion of the tax base and domestic resource mobilization.
Uzbekistan, an ADB member since 1995, has benefited from the bank's commitments, including loans, grants, and technical assistance totaling $10.8bn. ADB's commitment revolves around achieving prosperity, inclusivity, resilience, and sustainability in Asia and the Pacific, with the overarching goal of eradicating extreme poverty. Established in 1966, ADB is owned by 68 members, 49 of which hail from the region.
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