Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth

Figure 4.8: Business Innovation and Finance, Uzbekistan, 2013
Percent
Technology licensed from
foreign companies
New product/service
introduced
Government/state
ownership (at least 10%)
Access to bank loan/
line of credit
Loan application
rejected
Spending on R&D
0
10
20
30
40
50
Small (5–19)
Medium (20–99)
Large (100+)

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Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth
150
4.2. financial Sector Development: Trends
and Challenges
Sound development of a stable financial sector is essential to promote private 
sector development, associated job creation, and sustainable economic 
growth. In Uzbekistan, a bank-centered financial system has been established, 
with commercial bank credit as a key source of funding for enterprises’ working 
and investment capital. The nonbank finance industry and capital market have 
yet to be a source of funding for private businesses, especially SMEs. Financial 
infrastructure such as a credit bureau and a collateral registry need to be 
improved and strengthened before they can effectively reach out to the private 
sector. The following subsections review the financial sector in Uzbekistan and 
discuss key challenges.
4.2.1. Banking sector
That the credit market expands as the economy grows is empirically 
recognized. Central and West Asia follow this trend, as shown by the positive 
correlation between gross domestic product (GDP) per capita and bank 
credit with GDP (Figure 4.9). Uzbekistan also generally follows this trend, but 
shows some volatility due to complex external and internal factors including 
the currency devaluation that was triggered when the country liberalized its 
foreign exchange markets.
GDP = gross domestic product.
Notes: Bank credit/GDP (%) refers to bank loans outstanding as a percent of GDP for Uzbekistan and 
domestic credit to private sector by banks as a percent of GDP for other countries. For Uzbekistan, 
data collected on forms specially designed by the author. Central and West Asia is Armenia, Azerbaijan, 
Georgia, Kazakhstan, the Kyrgyz Republic, Pakistan, Tajikistan, and Uzbekistan.
Sources: Author’s estimates based on data received from the Central Bank of Uzbekistan on 2 October 
2018, and World Bank. World Development Indicators. http://www.databank.worldbank.org/ (accessed 20 
September 2018). 
UZB-04
UZB-05
UZB-06
UZB-07
UZB-08
UZB-09
UZB-10
UZB-11
UZB-14
UZB-12
UZB-13
UZB-15
UZB-16
UZB-17
0
10
20
30
40
50
60
2.0
2.5
3.0
3.5
4.0
4.5
Bank Credit/GDP (%)
GDP per capita (current $, ln)