TASHKENT

Germany’s KfW development bank will allocate a 26.8 million euro loan for the development of small and medium-sized enterprises (SMEs) across Uzbekistan and another 3 million euro grant for the implementation and consulting services for the project.

Small and medium-sized businesses in Uzbekistan have been particularly affected by restrictions to curb the COVID-19 pandemic. Almost 74 percent of job creators in the populous Central Asian nation are small businesses, and more than 60 percent of jobs are located in rural areas.

The loan is to be provided at 2 percent per annum for a period of 30 years with a grace period of 10 years, according to the presidential resolution.

The document said that the project implementation period was four years and it would also include enterprises engaged in the agriculture sector in line with the Central Asian nation’s strategy of agricultural development for 2020-2030.

The document tasks the relevant government bodies to focus on less developed neighbourhoods in all regions of the country.

In June, Uzbekistan’s private Hamkorbank was given a $20 million local currency credit line by the Asian Development Bank (ADB) for the financing of SMEs and agricultural producers.

The bank used 80 percent of the loan proceeds to support businesses in remote regions of the country. The credit line was opened without government guarantees.

“Small businesses and agricultural producers are important to Uzbekistan’s economy, but they face difficulties accessing finance, especially in remote areas of the country,” Christine Engstrom, ADB’s private-sector financial institutions’ head, said in a statement.

“This line will make much-needed funding in the local currency more available and thus help them improve their livelihoods while helping to rebuild the country from the coronavirus (COVID-19) pandemic,” ADB said.

Hamkorbank, a joint-stock commercial bank with foreign capital, founded in 1991, is the largest private sector bank in Uzbekistan, specialising in financing and servicing micro, small and medium-sized businesses and individuals.