The Asian Development Bank (ADB) today approved a $300 million sector development program to support the Government of Uzbekistan’s efforts to expand access to finance for unbanked and underbanked microenterprises, fostering sustainable and inclusive growth in the country.

“An inclusive and sustainable microfinance sector is essential to support micro and small businesses which drive economic growth and job creation in Uzbekistan,” said ADB Director General for Central and West Asia Eugene Zhukov. “The financial reforms backed by ADB will support Uzbekistan’s government efforts in commercialization of state-owned banks. The reforms will also help to create an enabling environment for development of microfinance institutions, so they better serve the needs of farmers, micro and small enterprises (MSEs) and promote financial stability.”

The Inclusive Finance Sector Development Program Subprogram 1 will support structural reforms to improve the policy environment for the development of inclusive finance, enhance the institutional capacity of financial services providers, and diversify funding sources to support growth in the microfinance market.

“Through this loan, ADB is expanding its partnership with Uzbekistan to ensure entrepreneurs, in particular women, have equal access to financial products and services. This will help improve their lives and livelihoods,” said ADB Country Director for Uzbekistan Kanokpan Lao-Araya.

State-owned commercial banks dominate the country’s finance sector while microfinance organizations, which provide inclusive finance, represent only 0.5% of the banking system. According to 2021 Global Findex data, only 44% of Uzbek adults possess an account with a formal financial institution—significantly lower than the regional average of 58% in Central Asia.

The nascent level of commercial microfinance has resulted in a significant credit gap within the inclusive finance market for SMEs. ADB’s support will help the government address the credit gap, expand the inclusive finance system, and promote sustainable and inclusive growth in line with the country’s development plan, Uzbekistan 2030 Strategy.