President of Uzbekistan Shavkat Mirziyoyev signed an ordinance to provide comprehensive financial and institutional support for the development of small businesses. This initiative aims to foster a thriving small business ecosystem and drive economic growth in Uzbekistan.
According to the decree, a comprehensive program of continuous support for small businesses will be launched from October 1. The Business Development Bank, formerly Kishlok Kurilish Bank, will play an important role in implementing this program, acting as the base bank responsible for its execution.
To ensure the success of this program, the government has allocated substantial funds from the state budget. 6 trillion soums will be allocated for the program’s implementation from 2023 to 2026. Additionally, 1.2 billion dollars will be raised from international financial institutions, further boosting the available resources.
The near future
The program aims to benefit a wide range of participants, including entrepreneurs, self-employed individuals, home-based workers, craftsmen, dekhkan farms, non-governmental educational organizations, and small businesses with three or more permanent employees.
Eligible participants should have at least one year of experience in their respective fields. The program also extends to individuals and legal entities that have successfully implemented projects under family entrepreneurship programs and have a positive credit history.
Participants in the program can expect various forms of financial support. This includes allocating loans up to 1.5 billion soums for establishing or expanding businesses, with terms of up to 7 years and a grace period of up to two years.
Working capital loans for up to 3 years with an annual interest rate exceeding the Central Bank’s main rate by 4% can also be obtained. Additionally, leasing options for the purchase of fixed assets will be provided. Notably, loans up to 100 million soums can be obtained without collateral, while loans up to 150 million soums will require a reduced collateral requirement of 50%.
Furthermore, the program offers the opportunity to transfer fixed assets worth up to 1.5 billion soums with the option of payment in installments over up to 7 years.
The program allows for a contribution of a share in the form of vacant state property, land plots, equipment, buildings, and structures. This contribution can amount to up to 20% of the project’s value, with a maximum limit of 1 billion soums. This provision applies to new and existing projects aimed at expanding the production capacity of small businesses.
Eligible projects should have been operating for more than 24 months and have a size of working capital ranging from 1 billion soums to 10 billion soums. Additionally, these projects should provide permanent employment for at least ten people.
To further support program participants, consultations will be available on various business-related matters. These include obtaining licenses, permits, certificates, customs and tax administration, import and export operations registration, participation in public procurement, and purchasing and leasing land, buildings, and structures.
Participants can also benefit from privileges, preferences, and other measures to support their businesses.
It is worth noting that the announcement of these measures to support small and medium-sized businesses was made by Uzbek President Shavkat Mirziyoyev during an open dialogue with entrepreneurs in August. This demonstrates the government’s commitment to fostering a conducive environment for small business growth and development in Uzbekistan.