TASHKENT, UZBEKISTAN (June 4, 2021) — The Asian Development Bank (ADB) and Hamkorbank have signed an agreement to provide a credit line worth the equivalent of US$20 million in Uzbek Soums in order to expand access to crediting micro, small and medium-sized enterprises (MSMEs) and agricultural borrowers. “Small businesses and agricultural producers are important to Uzbekistan's economy, but they face difficulties in accessing finance, especially in remote areas of the country,” said Christine Engstrom, director of ADB's Private Sector Financial Institutions. “This line will provide greater access to much-needed local currency funding and thus help them improve their livelihoods while contributing to the country’s recovery from the coronavirus (COVID-19) pandemic.”

Nearly 74% of the country's employers work in small businesses, and more than 60% of jobs are in rural areas. Access to finance, especially in local currency, has become even more difficult due to the COVID-19 pandemic. To fill this gap, 80% of the loan proceeds will be directed to borrowers in remote regions.

“Hamkorbank and ADB have long-term fruitful cooperation, and the number of joint projects has long exceeded a dozen,” said Bakhtiyor Zhuraev, Chairman of the Board of Hamkorbank. “Loan funds under this agreement will be directed to business entities whose business has felt the negative impact of the COVID-19 pandemic, as well as to agribusiness entities located in remote regions. This agreement is unique in that one of the world's largest financial institutions, ADB, is providing a $20 million credit line without government guarantees to a commercial bank in Uzbekistan. This fact once again proves that Hamkorbank and ADB have set their vector for long-term and mutually beneficial cooperation based on trust.”

The credit line will promote gender equality by increasing lending to women-led MSMEs. In 2019, only 11.9% of companies registered in Uzbekistan had a majority share in the authorized capital owned by women, and only 14.0% of companies had a minority share owned by women. In 2017, only 2.5% of total bank loans in Uzbekistan were issued to women.

This line will contribute to Hamkorbank's development of the country's financial sector, as bonds in local currency will be issued to finance operations. It should be noted that the Government of Uzbekistan began implementing banking sector reforms in 2017, which include increased private sector participation and a privatization roadmap for some state-owned banks. Given the lack of access to developed capital markets and limited deposits, ADB's long-term local currency financing will strengthen Hamkorbank's lending capacity, which will further complement the above reforms.

Joint-Stock Commercial Bank "Hamkorbank" with the participation of foreign capital, founded in 1991 and is the largest private sector bank in Uzbekistan, specializing in financing and servicing MSMEs and individuals.

Additional information: www.hamkorbank.uz

ADB is committed to achieving a prosperous, inclusive, and sustainable Asia-Pacific region while continuing efforts to eradicate extreme poverty. ADB was founded in 1966 and has 68 members, 49 of which are in the region.

More information: www.adb.org