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Uzbekistan: Small and Medium-Sized Enterprises Development Program (Subprogram 1)

Sovereign (Public) Project | 42007-020 Status: Proposed

The proposed Small and Medium-Sized Enterprises Development Program aims to support the Government of Uzbekistan in improving the ecosystem for small and medium-sized enterprises (SMEs) to become catalysts for economic diversification and high value-added job creation, in line with the country's overall development strategy. The ecosystem will be improved through a simplified regulatory, policy, and institutional framework; diversified financial instruments; digital infrastructure; skilled labor; and improved financial and digital literacy.

 
Project Name Small and Medium-Sized Enterprises Development Program (Subprogram 1)
Project Number 42007-020
Country Uzbekistan
Project Status Proposed
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan: Small and Medium-Sized Enterprises Development Program (Subprogram 1)
concessional ordinary capital resources lending / Asian Development Fund US$ 100.00 million
TA: Support to Small and Medium-Sized Enterprise Development Program
Technical Assistance Special Fund US$ 250,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Private sector development
Sector / Subsector

Education / Technical and vocational education and training

Finance / Finance sector development - Inclusive finance - Small and medium enterprise finance and leasing

Industry and trade / Small and medium enterprise development - Trade and services

Public sector management / Public expenditure and fiscal management

Gender Equity and Mainstreaming Effective gender mainstreaming
Description

The proposed Small and Medium-Sized Enterprises Development Program aims to support the Government of Uzbekistan in improving the ecosystem for small and medium-sized enterprises (SMEs) to become catalysts for economic diversification and high value-added job creation, in line with the country's overall development strategy. The ecosystem will be improved through a simplified regulatory, policy, and institutional framework; diversified financial instruments; digital infrastructure; skilled labor; and improved financial and digital literacy.

The program is included in the country operations business plan for Uzbekistan, 2021-2023 of the Asian Development Bank (ADB) and is aligned with ADB's country partnership strategy for Uzbekistan, 2019-2023. It is also aligned with ADB's Strategy 2030 operational priorities 1, 2, 3 and 6, which support SME development, quality job creation, gender equality, and strengthening institutional capacity and governance. Improving the ecosystem for SME development requires parallel multisector policy, institutional, and process reforms. In Uzbekistan, the situation is compounded by the multiplicity of agencies involved and the ongoing restructuring of some of these agencies, including the Small Business Entrepreneurship Development Agency (SBEDA) which requires substantial capacity building to lead reforms effectively. The coordination necessary to enable each subprogram to, individually and collectively, achieve meaningful improvements using well-sequenced, cross-sector reforms across many weak agencies, is the key rationale for a two-subprogram policy-based programmatic approach. The approach will also help the SBEDA to become an effective host institution for future SME development interventions through a sector development program or a results-based program.

Project Rationale and Linkage to Country/Regional Strategy Since 1996, ADB has supported SMEs and microenterprises in Uzbekistan through loans and technical assistance (TA), and an equity investment in Ipak Yuli Bank. The focus has been (i) working capital and fixed assets financing, (ii) improving the risk assessment capacity of the participating financial institutions to serve SMEs better, and (iii) financing agro-processing SMEs to catalyze rural enterprises and increase rural employment. The assessment of the implementation of these loans and TA projects has highlighted the need to (i) engage in policy dialogue to catalyze the regulatory, institutional, and financial reforms necessary for SME development; and (ii) strengthen the capacity of financial institutions in subproject appraisal and supervision, credit risk management and financial disclosure, and corporate governance.
Impact
Outcome
Outputs
Geographical Location Nation-wide
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Responsible ADB Officer Sood, Priyanka
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, CWRD
Executing Agencies
Ministry of Finance
5 Mustaqiliik Square
Tashkent 100008
Republic of Uzbekistan
Timetable
Concept Clearance 10 May 2021
Fact Finding -
MRM 14 Jul 2021
Approval -
Last Review Mission -
Last PDS Update 11 May 2021

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