The Asian Development Bank (ADB) approved a $300 million loan to support the Government of Uzbekistan’s efforts to develop an inclusive and sustainable microfinance sector, stated an ADB press release.
The ADB’s Inclusive Finance Sector Development Program aims to improve the policy environment for the development of inclusive finance by enhancing the institutional capacity of financial services providers and diversifying funding sources.
Only 44% of Uzbek adults possess an account with a formal financial institution–significantly lower than the regional average of 58% in Central Asia. This is especially true for women, who are more likely to be underbanked, the ADB release noted. The ADB’s loan is expected to help create an enabling environment for the development of microfinance institutions that will, in turn, support the growth of small and micro enterprises in the country.
Eugene Zhukov, ADB Director General for Central and West Asia, said: “An inclusive and sustainable microfinance sector is essential to support micro and small businesses which drive economic growth and job creation in Uzbekistan.”
“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,” Zhukov added.
Kanokpan Lao-Araya, ADB Country Director for Uzbekistan, said: “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.”