Uzbekistan aims to further develop entrepreneurship
By Kamila Aliyeva
Uzbekistan continues to implement economic reforms aimed at further developing domestic entrepreneurship and creating opportunities for small business with specific accent on the agriculture sector.
A conference was held by the National Bank for Foreign Economic Activity on the role and importance of microcredit in the development of entrepreneurship, according to the Uzbek Foreign Ministry.
The National Bank provides microloans in the amount of up to 100 times the minimum wage for the cultivation of agricultural products, development of livestock, camel breeding, horse breeding, rabbit breeding, fish farming, poultry and beekeeping, greenhouses in personal subsidiary plots and the purchase of seeds and seedlings.
Moreover, microcredits for the purchase of seedlings of fruit trees and vines, development of fish farming and poultry farming are provided for a period of up to 3 years with a one-year grace period, for the development of livestock, horse breeding, camel breeding, beekeeping, rabbits breeding - for up to 3 years with a six-month grace period while for growing unabi and walnut - for up to 5 years with a three-year grace period.
The conference noted that the National Bank stimulates entrepreneurial initiatives of college graduates for active involvement in the implementation of state youth policy, support of innovative business projects for young people and rational use of the potential of a harmoniously developed generation in the development of the private sector.
If a graduate conducts an activity without forming a legal entity, he or she is granted a loan in the amount of up to 200 times the minimum wage, while carrying out activities with the formation of a legal entity will allow them to get a loan in the amount of 300 minimum wages.
“Loans to college graduates to launch business are granted for up to 12 months, to replenish working capital necessary for organizing the cultivation and processing of agricultural products and purchase of equipment - for up to 2 years, to finance investment projects - for more than 3 years,” head of the credit department of the National Bank Faizulla Shoismatov said.
To this end, more than 2,000 graduates were granted preferential capital in the amount of 50 billion soums during 8 months of the current year.
Even though Uzbekistan’s economy is relatively closed, it has been growing steadily due to its vast natural resources of oil, natural gas and gold. Receipts from these key industries allow the government to control the economy through investments in services and industry.
The overall investment climate demonstrated some improvement in recent years in Uzbekistan – the government simplified business registration procedures, introduced some additional tax incentives for investors, improved private property protection legislation and streamlined customs regulations.
In 2017, the government reduced the mandatory sale rate by businesses of foreign currency earnings from 50 to 25 percent. The president announced upcoming liberalization of the banking sector and transition to a system of free currency conversion.
The Asian Development Bank (ADB) has previously lowered the GDP growth forecast for Uzbekistan in 2017 by 0.2 percentage points to 6.8 percent. The bank’s specialists noted that GDP growth of Uzbekistan will be slightly weaker, as the economy is adjusting to the devaluation of the soum and the liberalization of monetary policy.
However, the Uzbek economy will grow 7.3 percent in 2018, according to ADB. The forecast has been improved by 0.2 percentage points.
In 2017, inflation in Uzbekistan is expected to be within 11-12 percent. The inflation forecast is increased under the influence of various factors including the devaluation of the soum.
The Central Bank of Uzbekistan devalued the national currency – soum – by almost two times on September 5, setting the official exchange rate of US dollar at 8,100 soums/USD compared to 4,210.35 soums/USD on Sept. 4.
The banking system in Uzbekistan remains closely controlled by the state. There are 26 commercial banks in the banking system of Uzbekistan, including 3 state-owned, 5 with the participation of foreign capital, 7 private and 11 joint-stock ones.
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Kamila Aliyeva is AzerNews’ staff journalist, follow her on Twitter: @Kami_Aliyeva
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