Uzbekistan Secures US$100 Million World Bank Loan to Support MSME Development

Tashkent, Uzbekistan (UzDaily.com) — The World Bank’s Board of Executive Directors has approved a US$100 million loan and a US$5 million grant for Uzbekistan. The funds will be allocated to the implementation of the Access to Finance for Jobs and Growth Project (FINGROW), aimed at expanding access to credit and private equity investment for micro, small, and medium-sized enterprises experiencing capital shortages.

Micro, small, and medium-sized enterprises account for more than 90 percent of all companies in Uzbekistan, provide around 75 percent of employment, and generate approximately 55 percent of the country’s gross domestic product. Despite notable growth in lending to this segment in recent years, access to finance remains constrained, limiting business expansion, economic growth, and job creation.

Estimates indicate that more than one-third of MSMEs do not have bank accounts, while less than 30 percent of their sales are conducted electronically. Access to credit remains low, with only 10 percent of small enterprises and 16 percent of medium-sized enterprises reporting outstanding loans. Total MSME demand for debt financing is estimated at about US$13 billion, with a financing gap of roughly US$6 billion.

Financial constraints are particularly acute for women-led enterprises. Although they account for nearly one-third of registered MSMEs, they receive only around 14 percent of total lending. As a result, 23 percent of women-led firms cite access to finance as their main challenge, compared with 10 percent of male-led enterprises. This imbalance hinders the development of women’s entrepreneurship and constrains the country’s economic potential.

At the same time, Uzbek MSMEs seeking to scale up their operations show strong interest in attracting private equity investment. Demand for such capital is estimated at US$20–30 billion, yet the combined capital raised by the three private equity funds currently operating in the country amounts to only about US$2 billion.

The World Bank–financed FINGROW project will support JSC Entrepreneurship Development Company under the Ministry of Economy and Finance in addressing key barriers to MSME access to finance. Professionally managed subsidiaries of the company will work with banks, microfinance institutions, and private equity investors to provide credit guarantees to MSMEs and facilitate the attraction of private capital into the equity of competitive enterprises.

As noted by World Bank Regional Director for Central Asia Najy Benhassine, promoting innovative financial services and strengthening institutions responsible for expanding access to capital and supporting private sector growth will open new opportunities for fast-growing companies in Uzbekistan and contribute to entrepreneurship development and the creation of more and better-paid jobs, including for women and young people.

By 2030, the project is expected to enable around 7,000 MSMEs to gain access to credit financing, including approximately 4,500 enterprises led by women and young entrepreneurs. This support is projected to help beneficiary companies create about 100,000 new and higher-paying jobs, with women and youth accounting for more than half of them.

In addition, the project will support up to 70 high-growth small and medium-sized enterprises through private equity investment, as well as the transfer of managerial knowledge and sectoral expertise required for business expansion. A significant share of these companies will be led by women and young managers.

Subsidiaries of JSC Entrepreneurship Development Company, in partnership with banks, microfinance institutions, and private investors, plan to additionally mobilize around US$500 million in private capital. These resources will substantially expand MSMEs’ access to credit financing and ensure increased equity investment.

The project is part of the US$4 billion regional Access to Finance for Jobs and Growth (FINGROW) program implemented by the World Bank Group, which aims to improve business access to financial services and instruments across Europe and Central Asia. The program is expected to stimulate private sector growth and create up to 3.5 million jobs. Uzbekistan and Türkiye are the first countries in the region to receive support under the FINGROW initiative.