The World Bank’s Board of Executive Directors has approved a $100 mln loan and a $5 mln grant for Uzbekistan. The funding will support the Access to Finance for Jobs and Growth Project, known as FINGROW. The programme aims to expand access to credit and private equity for micro, small and medium enterprises.
MSMEs account for more than 90% of businesses in Uzbekistan. They employ around 75% of the workforce and generate about 55% of GDP. Despite recent growth in lending, many firms still struggle to access capital. This limits business expansion, economic contribution and job creation.
Gaps in Financial Inclusion Remain
More than one third of MSMEs do not have bank accounts. Less than 30% of sales are conducted electronically. Access to loans remains low, with only 10% of small firms and 16% of medium-sized enterprises reporting access to credit. Total demand for MSME lending is estimated at $13 bn, leaving a financing gap of about $6 bn.
Women own nearly one third of registered MSMEs. However, they receive only around 14% of SME loans. As a result, 23% of women-led firms cite access to finance as their main challenge. This compares with 10% among male-led businesses. These disparities restrict growth and reduce overall economic potential.
Limited Access to Private Equity
Many MSMEs seeking to scale up are interested in private equity investment. Demand is estimated at $20 to $30 bn. This far exceeds the $2 bn in committed capital from the three private equity funds currently operating in Uzbekistan.
Under the FINGROW project, World Bank funding will support the Entrepreneurship Development Company, which operates under the Ministry of Economy and Finance. Dedicated EDC subsidiaries will work with banks, microfinance institutions and private equity investors. They will provide loan guarantees and help facilitate equity investments for competitive MSMEs.
«By driving financial innovation and strengthening institutions tasked with expanding access to capital and supporting private sector growth, the FINGROW Project is unlocking opportunities for high-growth businesses in Uzbekistan, fueling entrepreneurship, and creating more and better-paid jobs, including for women and youth,» said Najy Benhassine, the World Bank Regional Director for Central Asia.
By 2030, around 7,000 MSMEs are expected to gain access to credit. This includes about 4,500 businesses led by women and youth. The supported firms are projected to create 100,000 new and better-paid jobs. Women and young workers are expected to take more than half of these roles.
Private Capital Mobilisation
Up to 70 high-growth SMEs will receive targeted support to expand through private equity investment and knowledge transfer. Many of these firms will be led by women and youth. In parallel, EDC subsidiaries are expected to mobilise an additional $500 mln in private capital.
The project is part of the wider FINGROW programme, a $4 bn World Bank Group initiative across Europe and Central Asia. The programme aims to improve access to finance, strengthen private sector growth and create 3.5 mln jobs. Uzbekistan and Turkiye are the first countries in the region to benefit from the initiative.
Kursiv also reports that according to EBRD, women entrepreneurs have demonstrated better loan repayment rates than their male counterparts.
