The Islamic Development Bank Group allocates $40 million to support small businesses in Uzbekistan

The Cabinet of Ministers has adopted a resolution titled “On measures to implement the project ‘Strengthening the Economic Resilience of Small and Medium Enterprises’ in cooperation with the Islamic Development Bank.”

To provide additional financing opportunities for small and medium enterprises (SMEs), expand the range of financial services offered, and enhance the potential of Islamic financing, the Cabinet of Ministers has decided:

• A loan and agency agreement was signed between the Republic of Uzbekistan and the Islamic Development Bank (IsDB) on April 18, 2024, to finance the project “Strengthening the Economic Resilience of Small and Medium Enterprises.” The agreement includes a total amount of $30 million with a 3-year grace period and a 10-year repayment term.
• A loan agreement was signed between the Republic of Uzbekistan and the IsDB (on behalf of the Islamic Solidarity Fund for Development) on April 18, 2024, to allocate $10 million for the same project, also with a 3-year grace period and a 10-year repayment term.
• Uzbekistan’s contribution to the project includes $0.3 million in the form of tax and customs benefits.
• The project feasibility documents have been approved by the IsDB. Key Provisions:
• The Ministry of Economy and Finance of the Republic of Uzbekistan is designated as the responsible executive body for timely project implementation, coordination, and ensuring effective use of IsDB funds.
• The IsDB will allocate $30 million to the participating “Bank for Business Development” JSC and $7.5 million to the “Entrepreneurship Development Company” JSC as resources for the project.
• The repayment of IsDB funds, including additional charges and interest, will be covered by the participating commercial bank, the company, and the state budget of the Republic of Uzbekistan.
• The project will be implemented during the period from 2025 to 2027.
• A Project Implementation Group (PIG) will be established under the Ministry of Economy and Finance to oversee project execution.
• The annual expenditure estimate and staff schedule for the PIG during the project implementation period will be approved by the Ministry of Economy and Finance.