Uzbekistan: Small Business Finance Project
The project will support participating financial institutions (PFIs) to provide loans to small businesses. The TA will help PFIs strengthen credit underwriting to improve rural outreach, and enhance financial literacy of their small business clients.
Project Details
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Project Officer
Kuchkarov, Adhamjon
Central and West Asia Department
Request for information -
Country/Economy
Uzbekistan -
Modality
- Loan
- Technical Assistance
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Sector
- Finance
Related Projects
| Project Name | Small Business Finance Project | ||||||||
| Project Number | 42007-018 | ||||||||
| Country / Economy | Uzbekistan |
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| Project Status | Closed | ||||||||
| Project Type / Modality of Assistance | Loan Technical Assistance |
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| Source of Funding / Amount |
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| Strategic Agendas | Environmentally sustainable growth Inclusive economic growth |
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| Drivers of Change | Gender Equity and Mainstreaming Governance and capacity development Knowledge solutions Partnerships Private sector development |
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| Sector / Subsector | Finance / Small and medium enterprise finance and leasing |
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| Gender Equity and Mainstreaming | Effective gender mainstreaming | ||||||||
| Description | The project will support participating financial institutions (PFIs) to provide loans to small businesses. The TA will help PFIs strengthen credit underwriting to improve rural outreach, and enhance financial literacy of their small business clients. | ||||||||
| Project Rationale and Linkage to Country/Regional Strategy | Favorable hydrocarbon revenues and substantial public investments supported a strong gross domestic product (GDP) growth at an annual average rate of 8% during 20002015. The GDP per capita increased from $558 to $2,036 and the poverty rate decreased from 27% to 14% during the same period. An industry-focused growth strategy resulted in an increase in the industry sector's share of GDP from 14% in 2000 to 24% in 2015, while the agriculture sector's share of GDP decreased from 30% to 17% during the same period. However, the strong GDP growth failed to effectively absorb the country's growing workforce. While the unemployment rate remained low at 5.2% in 2015, the number of Uzbek migrants doubled to 2 million during 20002015. The ongoing recession in the Russian Federation, which hosts over 90% of Uzbek migrant workers, has led to an increase of returning migrants, posing challenges to absorb them into the economy. Small businesses effectively generate employment and income, and are critical for Uzbekistan's inclusive growth. The financial system is dominated by banks, which control 94% of finance sector assets. Eight state-owned banks control 75% of banking assets and provide the bulk of credit to state-owned entities. During 20112015, bank credit to small businesses substantially increased from 4.5% to 7.1% of GDP, reflecting a compound annual growth rate (CAGR) of 34.1%. However, lending to small businesses still represents less than one-third of overall bank credit, which is insufficient given their economic significance. Eighty percent of small businesses are still being funded by family and friends and informal resources. Access to finance remains a key constraint for private business growth. |
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| Impact | Improved contribution of small businesses to inclusive economic growth and employment |
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| Project Outcome | |
|---|---|
| Description of Outcome | Increased sustainable provision of PFIs' financing to small businesses |
| Progress Toward Outcome | Project implementation is on track. Utilization of credit lines by PFIs is now improved significantly. |
| Implementation Progress | |
| Description of Project Outputs | Expanded capacity of the PFIs for financing small businesses |
| Status of Implementation Progress (Outputs, Activities, and Issues) | OngoingOngoingOngoingOngoingOngoing |
| Geographical Location | Nation-wide |
| Safeguard Categories | |
|---|---|
| Environment | FI |
| Involuntary Resettlement | FI-C |
| Indigenous Peoples | FI-C |
| Summary of Environmental and Social Aspects | |
|---|---|
| Environmental Aspects | Safeguards due diligence for environment, indigenous people, and involuntary settlement were carried out during fact-finding. PFIs' environmental and social management systems (ESMS) were reviewed and capacity development needs identified. ADB engaged a TA consultant to assist PFIs and train their staff on ESMS implementation. Annual environmental and social reports were submitted to Ministry of Finance (the executing agency) and ADB timely, and disclosed on ADB website. |
| Involuntary Resettlement | No impact is expected |
| Indigenous Peoples | No impact is expected |
| Stakeholder Communication, Participation, and Consultation | |
| During Project Design | |
| During Project Implementation | Consultation with private sector is conducted during review missions. Team also conducts regular quarterly discussions with government agencies and PFIs on project progress. |
| Business Opportunities | |
|---|---|
| Consulting Services | Consulting services will include the engagement of (i) Agriculture Finance and Rural Banking Experts, (ii) Credit Scoring Experts, and a (iii) Small Business Banking Expert through a firm. An Environmental and Social Management System Specialist (international), and a Monitoring and Evaluation expert (national) will be hired individually. |
| Procurement | A capacity building technical assistance ($500,000) financed by Financial Sector Development Partnership Special Fund, will strengthen the PFIs' capabilities to lend to small businesses on a commercially sustainable basis. The TA will (I) strengthen PFIs' credit underwriting policies and procedures, (ii) develop a credit-scoring and loan original system facilitated by mobile devices for small business loans, (iii) improve rural outreach by establishing mobile loan processing, and (iv) strengthen PFIs' financial literacy programs for their small business clients. |
| Responsible ADB Officer | Kuchkarov, Adhamjon |
| Responsible ADB Department | Central and West Asia Department |
| Responsible ADB Division | Uzbekistan Resident Mission |
| Executing Agencies |
Ministry of Finance |
| Timetable | |
|---|---|
| Concept Clearance | 03 Mar 2016 |
| Fact Finding | 22 Feb 2016 to 04 Mar 2016 |
| MRM | 09 May 2016 |
| Approval | 30 Jun 2016 |
| Last Review Mission | - |
| Last PDS Update | 07 May 2020 |
Loan 3405-UZB
| Milestones | |||||
|---|---|---|---|---|---|
| Approval | Signing Date | Effectivity Date | Closing | ||
| Original | Revised | Actual | |||
| 30 Jun 2016 | 03 Mar 2017 | 29 May 2017 | 30 Jun 2022 | - | 05 Aug 2022 |
| Financing Plan | Loan Utilization | ||||
|---|---|---|---|---|---|
| Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
| Project Cost | 133.30 | Cumulative Contract Awards | |||
| ADB | 100.00 | 25 Aug 2022 | 99.99 | 0.00 | 100% |
| Counterpart | 33.30 | Cumulative Disbursements | |||
| Cofinancing | 0.00 | 25 Aug 2022 | 99.99 | 0.00 | 100% |
| Status of Covenants | ||||||
|---|---|---|---|---|---|---|
| Category | Sector | Safeguards | Social | Financial | Economic | Others |
| Rating | - | Satisfactory | - | Satisfactory | - | Partly satisfactory |
TA 9128-UZB
| Milestones | |||||
|---|---|---|---|---|---|
| Approval | Signing Date | Effectivity Date | Closing | ||
| Original | Revised | Actual | |||
| 30 Jun 2016 | 21 Jul 2016 | 21 Jul 2016 | 31 Dec 2019 | 31 Dec 2020 | 01 Mar 2021 |
| Financing Plan/TA Utilization | Cumulative Disbursements | |||||||
|---|---|---|---|---|---|---|---|---|
| ADB | Cofinancing | Counterpart | Total | Date | Amount | |||
| Gov | Beneficiaries | Project Sponsor | Others | |||||
| 500,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 500,000.00 | 25 Aug 2022 | 362,289.31 |
| Status of Covenants | ||||||
|---|---|---|---|---|---|---|
| Category | Sector | Safeguards | Social | Financial | Economic | Others |
| Rating | - | Satisfactory | - | Satisfactory | - | Partly satisfactory |
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.
The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
| Title | Document Type | Document Date |
|---|---|---|
| Small Business Finance Project: Environmental Monitoring Report (January-December 2021) | Environmental Monitoring Reports | Sep 2022 |
| Small Business Finance Project: Environmental and Social Monitoring Report (January-December 2020) | Environmental and Social Monitoring Reports | Aug 2021 |
| Small Business Finance Project: Environmental and Social Monitoring Report (January-December 2019) | Environmental and Social Monitoring Reports | Dec 2020 |
| Small Business Finance Project: Annual Safeguards Monitoring Report (January-December 2018) | Environmental and Social Monitoring Reports | May 2019 |
| Small Business Finance Project: Annual Safeguards Monitoring Report (March-December 2017) | Environmental and Social Monitoring Reports | Mar 2018 |
Evaluation Documents See also: Independent Evaluation
None currently available.
Related Publications
None currently available.
The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.
Requests for information may also be directed to the InfoUnit.
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ADB Loan To Help Fuel Small Business Lending, Stimulate Jobs, Growth
ADB has approved a $100 million loan that will be extended to four financial institutions for on lending to small businesses—the backbone of the Uzbekistan economy.
Tenders
| Tender Title | Type | Status | Posting Date | Deadline |
|---|---|---|---|---|
| TA9128: Strengthening participating financial institutions | Individual - Consulting | Closed | 27 Aug 2020 | 02 Sep 2020 |
| Ta9128: Strengthening Participating Financial Institutions | Individual - Consulting | Closed | 27 Aug 2020 | 02 Sep 2020 |
| Monitoring and Evaluation Specialist (Natl) | Individual - Consulting | Closed | 31 Jan 2018 | 09 Feb 2018 |
| Training Program to Develop the Skills of PFI Officers | Firm - Consulting | Closed | 24 Jan 2018 | 06 Feb 2018 |
| Environmental and Social Management System Specialist | Individual - Consulting | Closed | 20 Sep 2017 | 26 Sep 2017 |
Contracts Awarded
No contracts awarded for this project were found
Procurement Plan
None currently available.