The European Bank for Reconstruction and Development (EBRD) is stepping in to support young entrepreneurs in Uzbekistan, announcing a significant loan of up to $50 million (€42.7 million) to O’zsanoatqurilishbank, commonly referred to as SQB. This funding aims to enhance lending for micro, small, and medium-sized enterprises (MSMEs) that are led or owned by individuals under 35 years of age. The initiative comes at a crucial time as smaller businesses in Uzbekistan continue to face hurdles in securing bank credit. You know, it’s no secret that financing can be a real challenge for new business owners, especially when they lack the necessary documentation or history that banks typically demand.
This loan is part of the EBRD’s Youth in Business programme tailored for Central Asia. To put it into perspective, Uzbekistan is home to about 9.63 million individuals aged between 14 and 30, which makes up approximately 25.7% of the population as of early 2025. That’s a whole lot of young minds looking to make their mark! The SQB loan is just one piece of a larger puzzle, as the EBRD is involved in two operations totaling up to $100 million (€85.4 million) in Uzbekistan’s financial sector. Alongside this initiative, a separate operation of up to $50 million (€42.7 million) with the Mortgage Refinancing Company of Uzbekistan is set to bolster the residential mortgage market and establish more standardized lending practices.
Now, let’s talk numbers. During the period of January to September 2025, small businesses accounted for a staggering 51.5% of Uzbekistan’s GDP. That’s right—1.2 million small business entities were operating as of October 1, 2025. But here’s the kicker: Francis Malige, Managing Director and Head of the Financial Institutions Business Group at EBRD, pointed out that the core issue isn’t just about having cash available. “Liquidity is certainly abundant,” he remarked, “but a lot of it goes to sovereign lending and state borrowing, rather than financing the real economy.” This is where the SQB credit line comes into play, targeting young firms that frequently struggle to meet traditional banking standards.
For many of these smaller firms, the initial barrier isn’t necessarily a lack of innovative ideas. It’s more about proving they can meet the documentation and planning requirements banks use to evaluate risk. Malige noted that many SMEs often find themselves mismatched with the expectations of the banking system. “They do not speak to banks in a way that banks expect them to,” he said. This disconnect often stems from smaller businesses having less formal financial planning and lower transparency compared to their larger counterparts.
But it doesn’t stop there. For women entrepreneurs, the financing gap can begin even before they submit a loan application. Access to credit can hinge on whether they have the right information, networks, and support services to make available programs practically useful. Ceren Güven Güres, Head of the UN Women Central Asia Liaison Office, highlighted some progress in Uzbekistan regarding gender equality reforms, including initiatives aimed at supporting women entrepreneurs. However, she stressed that legal and policy changes alone don’t guarantee equal access. “Are they aware of their rights? Are they aware of these services?” she asked, emphasizing the ongoing challenges.
Once a business does make it to the bank, they often face another significant hurdle: collateral. Many young entrepreneurs or first-time business owners simply don’t have the property or equipment needed to back up a loan application. “A lot of banks require collateral assets, fixed assets, and very often SMEs do not have these in a way that can actually support borrowing from banks,” Malige explained. The banking system itself also plays a role in this issue. “Many banks treat SME lending as a sort of downgraded version of corporate lending. That’s not how it should be,” he lamented.
The EBRD is actively addressing these challenges by working with both borrowers and lenders through technical assistance, training, and risk-sharing instruments. This includes first-loss cover, which can help banks support clients who lack traditional collateral. For women business owners, external conditions beyond the banking system also shape their access to finance. Güres pointed out that social expectations, gender stereotypes, and caregiving responsibilities can severely restrict women’s ability to develop businesses, engage in networks, and utilize available services. “We need to go back to the root causes, the harmful social norms and gender stereotypes, the care burden on women,” she said.
Support for women entrepreneurs should not stop once they launch or formalize a business; ongoing mentoring, tailored assistance, grants, and loans are essential for helping these firms grow beyond the initial stages. There’s a lot at stake, and the future of young entrepreneurship in Uzbekistan hangs in the balance. Will these initiatives truly bridge the gap, or will challenges continue to loom large?
Kaynak: Orijinal Haber