Uzbekistan's state-owned banks must move away from traditional collateral-based lending and start assessing the actual cash flow of businesses, President Shavkat Mirziyoyev said today at a meeting in Andijan.

According to figures presented at the meeting, 35,000 people have been unable to obtain loans since the start of the year because they lacked collateral or a guarantor. Mirziyoyev said banks should not limit themselves to conventional forms of security or apply the same standard terms to every client.

Under the new approach, lenders would give greater weight to real cash flows, orders and contracts, accounts receivable, turnover and an entrepreneur's position in the business supply chain.

In particular, banks will accept a small business's long-term contract with an anchor company or a large customer as loan security.

Projects worth up to 500 million soums will not require a business plan. Lending decisions should be based on a business's cash flows rather than on the value of the collateral, the president said.

For loans financing the purchase of raw materials for export production, an insurance policy will be sufficient as security.

Nine state-owned banks have been ordered to develop and offer 20 new products within a month to help entrepreneurs grow their businesses. Bankers working in mahallas, or neighborhood communities, will explain the new services to residents and business owners.

In August, Mirziyoyev also called for a system that would support entrepreneurs from launching a business through to expanding it. Programs called Business Start, Business Lift and Business Yuksalish were announced that month, along with a counter-guarantee system designed to ease collateral requirements for loans of up to 10 billion soums.