TASHKENT, UZBEKISTAN (10 November 2023) — The Asian Development Bank (ADB) and Sanoat Qurilish Bank (SQB) signed a $50 million senior convertible loan to support Uzbekistan’s privatization of state-owned banks, which will strengthen the banking sector, contribute to economic growth and job creation. The International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD) are parallel lenders.

The loan proceeds will be used to help SQB expand its financing to underserved micro, small, and medium-sized enterprises (MSMEs), including those owned or led by women (WMSMEs). Portfolio diversification will contribute to SQB's transition into a fully universal commercial bank by serving a broader customer segment. ADB will also provide technical assistance to help SQB implement its transformation roadmap.

“ADB fully supports the Government of Uzbekistan in its transformation to a vibrant and inclusive market economy and its implementation of banking sector reforms. This project will support the stability of the country’s banking system, capitalization, and deposit levels while strengthening resilience and lending to climate projects and underserved MSMEs and WMSMEs” said ADB’s Director General of the Private Sector Operations Department Suzanne Gaboury. “This project also provides the region with a strong business case for other countries seeking similar reforms.”

In 2017 the Government of Uzbekistan embarked on an ambitious market reform agenda, including the privatization of more than 100 state-owned banks. In 2020, the government’s Strategy for Reforming the Banking Sector, 2020–2025, outlined directions and objectives for the banking sector and prioritized the privatization of six of the largest state-owned banks. ADB, as well as other multilateral development banks, have been supporting the privatization process and banking sector reforms.

“MSMEs continue to struggle to secure commercial financing to fund their growth, with women-owned being the most affected. ADB is supporting the enabling environment in Uzbekistan for MSMEs to have easier access to markets, as well as providing the much needed financing to close the financing gap for MSMEs,” said ADB’s Uzbekistan Country Director Kanokpan Lao-Araya. “ADB’s partnership in SQB builds on those two objectives.”

MSMEs play a significant role in Uzbekistan’s economy, comprising the majority of registered businesses and employing 74% of the workforce. However, access to financing remains a challenge, with only 13% of the sector having access to commercial loans. Women-led businesses face an even greater financing gap, estimated at $2.7 billion, with loans to women-owned businesses making up just approximately 2.5% of total bank loans. 

“ADB’s support comes at a crucial time for SQB to underpin investors’ confidence and further enhance SQB’s environmental, social and governance practices, and its digitalization process. ADB’s support in these areas is very important to us,” said SQB’s Chairman of the Management Board Aziz Akbarjonov.

Founded in 1922, SQB is one of the oldest banks in Uzbekistan and is the second-largest state-owned bank. SQB is one of the strongest brands and banking market leaders with one of the widest branch networks in the country.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

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