The Asian Development Bank (ADB) today approved a $100 million policy-based loan to support policy, regulatory, and institutional reforms needed to create an enabling environment for competitive financial markets in Uzbekistan.

“As Uzbekistan accelerates its transition toward a market economy, robust and competitive domestic financial markets are essential for mobilizing private investment,” said ADB Director General for Central and West Asia Yevgeniy Zhukov. “ADB will help develop financial markets in Uzbekistan and stimulate private investment—a key driver of economic growth and an important source of new jobs in the country.”

ADB’s Financial Markets Development Program will support reform measures to deepen and broaden Uzbekistan’s financial markets. It seeks to promote a more liquid government bond market and diversify the investor base. The program will also help develop critical market infrastructure, including surveillance systems and enhance the supply of alternative financial instruments such as exchange-traded funds.

“The program will help reduce systemic vulnerabilities in Uzbekistan’s financial system through diversification away from a predominantly bank-based system of financial intermediation. It will promote the development of the corporate securities market, enhance demand from institutional investors such as insurance companies, diversify the financial instruments available, and broaden the investor base,” said ADB Principal Financial Sector Specialist Syed Ali-Mumtaz H. Shah. “By strengthening governance of the financial markets, the program will enhance market efficiency and improve investor protection.”

“The program will play an important role in enabling investors to gain access to alternative investment opportunities and helping raise funds cost-effectively,” added ADB Principal Public Management Economist Çiğdem Akın. “This will help Uzbekistan diversify its financial system and advance toward its socioeconomic development objectives.”

ADB will provide a $500,000 technical assistance grant to support key reform actions under the program.

Uzbekistan joined ADB in 1995. Since then, ADB has committed loans, grants, and technical assistance amounting to $10.1 billion for the country.