In Uzbekistan, medium-sized businesses are grappling with a deficit in debt financing, a predicament highlighted by International Finance Corporation (IFC) expert Marie-Paule Claes during a seminar at the Central Bank of Uzbekistan on March 19. Reports of Central Bank of Uzbekistan shows that, the demand for debt financing from 5.5 mn medium-sized enterprises amounted to approximately $11.8 bn in 2021, as Spot disclosed.
Despite this considerable demand, lending to medium-sized enterprises remains significantly underdeveloped, with only 47% of the demand being met. State-owned banks are the primary source of financing for medium-sized businesses, accounting for 83% of total debt financing, while private banks contribute 16.8%. Conversely, pawnshops and microfinance organizations play a negligible role in providing financing to this segment.
The current lending landscape is characterized by a reliance on state banks, which poses inherent risks due to high rates of problem loans associated with their lending schemes. This reliance underscores the need for diversification in financing options tailored to the unique needs of medium-sized enterprises.
Traditionally, lending conditions have favored large enterprises, with financing channels such as bank branches and ATMs primarily catering to their requirements. Meanwhile, microfinance organizations and pawnshops focus predominantly on issuing consumer loans to individuals, neglecting the financing needs of medium-sized enterprises.
Innovation in the financial sector, particularly through fintech platforms, has yet to address the financing gap faced by medium-sized businesses. While fintech platforms facilitate payments between various stakeholders, they do not extend loans or financial services to this segment. Similarly, leasing companies have not actively participated in financing medium-sized enterprises.
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