BAKU, Azerbaijan, June 4
By Klavdiya Romakayeva - Trend:
The Asian Development Bank (ADB) and Uzbek Hamkorbank JSСB signed a loan for $20 million to expand access to credit for micro, small, and medium-sized enterprises (MSMEs) and agricultural borrowers in Uzbekistan, Trend reports referring to ADB.
According to ADB’s Private Sector Financial Institutions Division Director Christine Engstrom, MSMEs and agricultural producers are of great importance to Uzbekistan’s economy, but they face difficulties gaining access to finance, particularly in outlying areas.
“This loan will provide greater access to much-needed local currency financing, helping them to improve their livelihoods while contributing to the country’s recovery from COVID-19 pandemic,” Engstrom said.
It is noted that almost 74 percent of the country’s employment is generated by small businesses and more than 60 percent of those jobs are in rural areas. Access to finance, especially in local currency, has been a challenge made even more difficult by the COVID-19 pandemic.
It is reported that to help close this gap, 80 percent of the loan’s proceeds will be allocated to borrowers in outlying regions.
Chairman of the Management Board Bakhtiyor Jurayev Hamkorbank JSCB said that loan funds under this agreement will be allocated to business entities whose business has felt the negative impact of the COVID-19 pandemic, as well as to agribusiness entities located in remote regions.
“This agreement is unique due to the fact that one of the largest development financial institutions in the world, as ADB, provides the loan funds in the amount of $20 million without the government guarantee to a commercial bank of Uzbekistan,” Jurayev stressed.
In addition, the loan will promote gender equality by increasing loans to women-run MSMEs. In 2019, only 11.9 percent of registered companies in Uzbekistan were majority-owned by women, and just 14 percent had minority female ownership. In 2017, loans for Uzbek women represented only 2.5 percent of total bank loans.
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