ADB Approves $300M Loan to Boost Inclusive Finance and MSME Growth in Uzbekistan

ADB Country Director for Uzbekistan Kanokpan Lao-Araya emphasized that the program represents an important step toward making Uzbekistan’s economy more inclusive and market-oriented.

The Asian Development Bank (ADB) has approved a $300 million policy-based loan, including $100 million in concessional financing, to support the Government of Uzbekistan’s efforts to expand access to finance for micro, small, and medium-sized enterprises (MSMEs) — particularly those led by women. The funding will also strengthen the country’s rapidly evolving microfinance and digital finance sectors, building on earlier reforms designed to make Uzbekistan’s financial system more inclusive and resilient.

Strengthening Inclusive Finance

The newly approved financing forms Subprogram 2 of ADB’s Inclusive Finance Sector Development Program (IFSDP). It builds upon the foundations established in Subprogram 1, which focused on creating legal and institutional frameworks for inclusive financial systems.

Under the earlier phase, Uzbekistan implemented several key reforms such as:

• Increasing the maximum size of microloans, allowing small entrepreneurs greater access to working capital.

• Revising microfinance regulations to improve operational flexibility and governance.

• Joining the Women Entrepreneurs Finance Code, aligning with global best practices to enhance financing for women-led businesses.

• Developing Islamic microfinance regulations, opening new avenues for Sharia-compliant lending and financial inclusion.

The second phase aims to deepen these foundational reforms while broadening the financial inclusion agenda through targeted policies, institutional strengthening, and gender-responsive financing mechanisms.

Promoting Gender Equality and Consumer Protection

ADB Country Director for Uzbekistan Kanokpan Lao-Araya emphasized that the program represents an important step toward making Uzbekistan’s economy more inclusive and market-oriented.

“ADB is proud to support Uzbekistan’s transition to a more inclusive and market-based financial system,” she said. “This program will help unlock access to finance for the self-employed and microentrepreneurs, promote gender equality, and strengthen consumer protection in the financial sector.”

Subprogram 2 introduces a new generation of policy actions focused on consumer protection, responsible lending, and digital supervision. These include:

• Updating national guidelines for responsible lending practices.

• Regulating emerging financial technologies such as “buy now, pay later” platforms.

• Enhancing digital financial oversight to ensure safety, transparency, and fair access.

In addition, the program strengthens gender-responsive financial policies by supporting the gender equality policy for the financial sector, introducing gender quotas for financing, and requiring sex-disaggregated data reporting to improve accountability and impact measurement.

Expanding Financial Inclusion

Recent assessments of the National Financial Inclusion Strategy (NFIS) for 2021–2023 indicate encouraging progress. Approximately 60% of adults in Uzbekistan now hold accounts with formal financial institutions — a substantial increase driven primarily by the rapid expansion of digital banking and fintech adoption.

The continued integration of digital finance solutions has expanded access to credit, savings, and payment services, particularly for rural entrepreneurs and women-owned businesses. The new program seeks to sustain this momentum by reinforcing financial literacy initiatives and strengthening digital infrastructure.

Reforming and Stabilizing the Microfinance Sector

A key component of Subprogram 2 is the structural transformation of the microfinance sector. The reforms will enable the creation of deposit-taking microfinance banks, expanding access to finance for small borrowers while ensuring systemic stability.

To support this shift, Uzbekistan will adopt a risk-based regulatory and supervisory framework, in line with international banking standards. Two preliminary licenses have already been issued for the establishment of new microfinance banks — an important milestone in diversifying the country’s financial ecosystem.

Technical Assistance and Long-Term Vision

The ADB’s assistance extends beyond financial support. The program includes technical assistance to enhance institutional capacity, strengthen regulatory frameworks, and ensure the sustainability of reforms. The approach follows a programmatic model, with Subprogram 3 (2025–2027) expected to focus on deeper implementation and capacity-building across financial institutions.

By supporting both policy reforms and institutional strengthening, ADB aims to create a robust, competitive, and inclusive financial sector that drives small business development and economic resilience.

30 Years of Partnership Between ADB and Uzbekistan

This initiative comes as ADB and Uzbekistan celebrate 30 years of partnership. Since joining ADB in 1995, Uzbekistan has received $14.6 billion in public sector loans, grants, and technical assistance, spanning areas such as energy, infrastructure, agriculture, education, and financial reform.

Uzbekistan’s collaboration with ADB has played a central role in the country’s economic modernization, supporting its transition toward a market-driven, diversified economy with greater private sector participation.

As the government continues to reform its financial system, ADB’s $300 million loan will help empower MSMEs, promote women’s entrepreneurship, and foster financial innovation, ensuring that economic growth in Uzbekistan becomes more inclusive, equitable, and sustainable.