The World Bank’s Board of Executive Directors has approved a $100 million loan and a $5 million grant for the government of Uzbekistan to support the development of micro, small, and medium-sized enterprises (MSMEs). According to the World Bank’s press service, the funds will be used to implement the project Access to Finance for Job Creation and Business Growth (FINGROW).
World Bank data show that small and medium-sized businesses account for 90 percent of all enterprises in Uzbekistan, providing 75 percent of total employment and generating about 55 percent of the country’s gross domestic product. Despite an increase in lending volumes, however, these businesses continue to face limited access to capital, which constrains their growth. As a result, their contribution to the national economy declines and job creation slows.
More than one-third of MSMEs do not have bank accounts, and only about 30 percent of their sales are conducted online. Access to credit also remains weak: only 10 percent of small enterprises and 16 percent of medium-sized enterprises have taken out bank loans. At the same time, experts estimate business demand for credit at $13 billion, with a financing gap of around $6 billion.
The World Bank places particular emphasis on women entrepreneurs. Although women own nearly one-third of registered MSMEs in Uzbekistan, such businesses receive no more than 14 percent of total lending. In a survey, access to finance was identified as the main challenge by 23 percent of women-led enterprises, compared with 10 percent of those led by men.
There are also difficulties in attracting private equity investment. Demand for such investment is estimated at $20–30 billion, while the combined capital raised by the three private equity funds currently operating in Uzbekistan amounts to about $2 billion.
The World Bank notes that the FINGROW project will support the Entrepreneurship Development Company under Uzbekistan’s Ministry of Economy and Finance. Subsidiaries of this company will work with banks, microfinance institutions, and private equity investors to provide credit guarantees and assistance in attracting investment for the development of competitive enterprises. Through these mechanisms, the project aims to mobilize an additional $500 million for small and medium-sized businesses.
By 2030, the FINGROW project is expected to provide access to credit for 7,000 MSMEs, including 4,500 enterprises led by women and young entrepreneurs. These companies are projected to create around 100,000 well-paid jobs.
In addition, under the World Bank–supported program, about 70 high-growth-potential MSMEs will receive assistance through the attraction of private equity investment as well as the transfer of new knowledge and expertise. A significant share of this support will also go to businesses managed by women and young leaders.
ℹ️ Access to Finance for Job Creation and Business Growth (FINGROW) is a $4 billion regional World Bank Group program aimed at supporting small and medium-sized businesses in Europe and Central Asia. The initiative is designed to stimulate private sector growth and create up to 3.5 million jobs. Uzbekistan and Turkey are the first countries in the region to receive support under the FINGROW program.
