World Bank Project Unlocks Rural Entrepreneurship and Job Growth in Uzbekistan

Rasulbek Yusupov, a rope manufacturer from Khanka District, saw his business nearly collapse during the COVID-19 pandemic due to falling demand and disrupted supply chains.

Small businesses are the engine of job creation, innovation, and economic growth across Uzbekistan. Yet in rural areas, aspiring entrepreneurs often face far greater barriers to turning ideas into thriving ventures — including limited access to finance, smaller markets, higher transport costs, and fewer opportunities for networking and mentoring.

To address these challenges, the Second Rural Enterprise Development Project, funded by the World Bank and implemented by Uzbekistan’s Ministry of Employment and Poverty Reduction, has been supporting rural micro, small and medium-sized enterprises since its launch in July 2022.

As of December 2025, the project has reached more than 15,000 entrepreneurs nationwide, including those in Uzbekistan’s most economically and environmentally vulnerable regions, helping them establish new businesses and expand existing ones.

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Supporting Rural Small Businesses Creates Local Jobs

Through financing and advisory services, the project is unlocking rural entrepreneurial potential — boosting employment, expanding opportunities for women and youth, and narrowing the urban-rural divide by bringing new goods and services to remote communities.

One beneficiary is Ulugbek Ibragimov, a 60-year-old entrepreneur from Khanka District in the Khorezm region. With a loan from a local bank partnering with the project, he established a bottled water production facility in an area facing water scarcity and high salinity.

“Our main goal is to provide local residents with clean drinking water,” he said. “People here are experiencing the harsh effects of climate change.”

With modern filtration and bottling equipment, Ulugbek now employs 10 local residents, including four women.

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Helping Existing Businesses Recover and Expand

The project has also supported entrepreneurs rebuilding after economic shocks.

Rasulbek Yusupov, a rope manufacturer from Khanka District, saw his business nearly collapse during the COVID-19 pandemic due to falling demand and disrupted supply chains.

“I’m glad that with a loan from the project we restarted production,” Rasulbek said.

He has since hired six new employees, and his locally produced ropes provide an affordable alternative to imports. His operation also follows a zero-waste approach by recycling raw material scraps into finished products.

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Turning Loans Into Big Opportunities for Young Entrepreneurs

Access to capital remains one of the biggest obstacles for rural entrepreneurs. The project has injected much-needed financing into agribusinesses, shops, restaurants, aquaculture ventures, barbershops, and other enterprises.

In the Republic of Karakalpakstan, 23-year-old entrepreneur Shahzoda Fazylbekova expanded her family bakery with support from the project.

“Without the loan, we would have remained a small home bakery,” she said.

The financing allowed her to open a café in Beruniy, boosting sales by 30% and introducing a delivery service to reach remote customers. Her café employs three people, including two young women.

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Boosting Business Growth Through Renovation and Expansion

Another beneficiary, Nemat Jumabayev, a 36-year-old restaurant owner, used project-backed financing to renovate his business and expand operations.

Foot traffic increased significantly, with sales rising by 50–60%. The support also enabled him to open a second restaurant in Nukus, where he hired 10 new employees.

“Access to financing played a key role in improving business performance,” he noted.

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Business Incubators Driving Rural Innovation

A central pillar of the project has been the establishment of 22 business incubation hubs across Uzbekistan, providing training in:

• Financial literacy

• Entrepreneurial skills

• Business planning

• Marketing and customer outreach

These hubs also organize field visits to successful enterprises, helping entrepreneurs learn from real-world examples.

Gulsara Salieva, a 24-year-old business consultant at the incubator in Nukus, works with more than 50 entrepreneurs.

“Early-stage entrepreneurs don’t always know where to start,” she said. “That’s where business incubators play a crucial role.”

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Strong Results: Thousands of Subprojects and Jobs Created

The project’s impact is already substantial. By December 2025, it has supported more than:

• 2,850 subprojects across agriculture, aquaculture, tourism, construction, and rural services

• 12,000 new jobs, with over half held by women and young people

These investments have increased participating enterprises’ efficiency, revenues, and long-term sustainability.

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Building Inclusive Growth Beyond Urban Centres

By supporting rural entrepreneurs, Uzbekistan is strengthening local economies, creating jobs where they are most needed, and empowering groups often excluded from the labour market.

The Second Rural Enterprise Development Project demonstrates how targeted financing combined with advisory support and incubation ecosystems can transform rural communities, reduce inequality, and drive inclusive national growth.