Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth

Private Sector Development and Access to Finance
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SMEs’ limited access to finance is a structural problem in developing 
economies. Factors constraining SMEs’ access to finance have a common 
feature in most countries. SME surveys by the Asian Development Bank 
identified the common supply- and demand-side factors constraining 
SMEs’ access to finance.
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The key barriers SMEs identified were collateral 
and guarantee requirements for loans, followed by high lending rates and 
complicated procedures for borrowing from financial institutions. SMEs also 
recognized their lack of knowledge about available financial services and their 
inadequate management and human resources. 
Interviews by the author at the chamber of commerce, private sector 
commercial banks, and government authorities in October 2018
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identified 
similar constraints for small businesses’ access to finance. The Institute 
of Forecasting and Macroeconomic Research of the Ministry of Economy 
recognized that limited access to financial services is the most critical 
challenge for SME development in Uzbekistan, followed by a lack of skilled 
labor, product quality control, and legal protection issues. Due to commercial 
banks’ high lending rates (24%–28% per annum) and collateral requirements 
(real estate and vehicles), SMEs have difficulty accessing bank credit. Land 
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SME surveys were conducted in India, Kazakhstan, Malaysia, Papua New Guinea, the People’s Republic of 
China, the Philippines, the Republic of Korea, and Sri Lanka during 2013 and 2015. 
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Interviewed by the author on 2–5 October 2018, Tashkent.
GDP = gross domestic product, MSMEs = micro, small, and medium-sized enterprises; SMEs = small and 
medium-sized enterprises.
Source: Adapted from IFC (2017).
Figure 4.17: Financing Gap Faced by Micro, Small, and Medium-Sized