According to a press release by the Asian Development Bank (ADB), the bank, in partnership with Sanoat Qurilish Bank (SQB) have signed a $50 million senior convertible loan to support Uzbekistan’s privatization of state-owned banks, which will strengthen the banking sector, and contribute to economic growth and job creation. The International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD) are parallel lenders.
The loan will be used to help SQB expand its financing to underserved micro, small, and medium-sized enterprises (MSMEs), including those owned or led by women (WMSMEs). Portfolio diversification will contribute to SQB’s transition into a fully universal commercial bank by serving a broader customer segment. ADB will also provide technical assistance to help SQB implement its transformation roadmap.
“ADB fully supports the Government of Uzbekistan in its transformation to a vibrant and inclusive market economy and its implementation of banking sector reforms”, said ADB’s Director General of the Private Sector Operations Department, Suzanne Gaboury. “This project will support the stability of the country’s banking system, capitalization and deposit levels, while strengthening resilience and lending to climate projects and underserved MSMEs and WMSMEs”.
According to ADB’s Uzbekistan Country Director, Kanokpan Lao-Araya, “MSMEs continue to struggle to secure commercial financing to fund their growth, with women-owned enterprises being the most affected. ADB is supporting an enabling environment in Uzbekistan for MSMEs gain easier access to markets, as well as providing much needed financing to close the financing gap for MSMEs. ADB’s partnership with SQB builds on those two objectives”.
MSMEs play a significant role in Uzbekistan’s economy, comprising the majority of registered businesses and employing 74% of the workforce. However, access to financing remains a challenge, with only 13% of the sector having access to commercial loans. Women-led businesses face an even greater financing gap, estimated at $2.7 billion, with loans to women-owned businesses making up just 2.5% of total bank loans.
