Key facts
- EBRD is providing up to $50 million to Uzbekistan's SQB bank.
- The loan targets entrepreneurs under 35.
- Small businesses constitute over 50% of Uzbekistan's GDP.
- Many small firms struggle with loan requirements like collateral and financial records.
- The EBRD's support is part of a larger $100 million financial sector operation in Uzbekistan.
The European Bank for Reconstruction and Development (EBRD) is injecting up to $50 million into Uzbekistan's O’zsanoatqurilishbank (SQB) to bolster lending to young entrepreneurs. This initiative is part of the EBRD's Youth in Business programme for Central Asia, specifically targeting micro, small, and medium-sized enterprises led by individuals under 35.
This financing addresses a critical gap in Uzbekistan's economy, where small businesses contribute over half of the GDP but frequently struggle to access bank credit due to a lack of formal records, collateral, and financial planning. Francis Malige, an EBRD official, highlighted that while liquidity is abundant, it often flows to state borrowing rather than the real economy.
The loan aims to overcome barriers such as insufficient financial documentation, less formalised planning, and lower transparency that hinder SMEs from meeting traditional bank lending standards. The EBRD also works with lenders to place more emphasis on founder credibility and business plans, and provides technical assistance and risk-sharing instruments.
For women entrepreneurs, the challenges are compounded by social norms and care responsibilities, requiring support beyond just credit, including mentoring and tailored assistance. Ceren Güven Güres of UN Women noted that while Uzbekistan has made progress in gender equality reforms, awareness and practical access to services remain key issues.
This SQB credit line is part of two broader EBRD operations in Uzbekistan's financial sector, totaling up to $100 million, with another $50 million allocated to support the residential mortgage market.