OREANDA-NEWS. On April 03, 2009 The Central Bank of the Republic of Uzbekistan jointly with the MicroCredit Bank and the Chamber of Industry and Commerce of Uzbekistan conducted a press conference on the topic of "Banks' participation in the financing of small business and private entrepreneurship entities' projects" on 1 April this year.

The purpose of the event was to explain the importance of the benefits and preferences provided in accordance with the laws of the Republic of Uzbekistan, decrees and resolutions of the President, and other acts of legislation passed to support and further develop the spheres of entrepreneurship and small business and the role of commercial banks of the country in implementation of these processes.

In his speech Deputy Chairman of the Central Bank Shukhrat Haydorv noted that the share of small business in the GDP in 2008 comprised 48.2%. About 76% of the employed population is employed in this sphere.

An important stimulus in achievement of these high results were the decrees and the resolutions of the President of Uzbekistan, particularly those on the financial support of the small businesses and entrepreneurship by the commercial banks. As a result in 2008 the volume of loans extended by the commercial banks to the sphere of small business and private entrepreneurship grew by 68.2% compared to 2007 to around 1.25 trillion soums.

This year active efforts in this direction are carried on. In particular, it is envisaged that the commercial banks of the country will extend loans for further development of the small business sphere in the amount of 1.75 trillion soums. Moreover, the commercial banks have signed the agreements with the international financial organizations on the credit lines for some US145.6 million. Through the loans issued it is planned to create about 400,000 jobs.

The Chairman of the Board of the MicroCredit bank J. Sayfuddinov emphasized that the consistent measures being taken on the initiative of the President Islam Karimov aimed at further reformation and liberalization of the banking system help improve the livelihood of the population.

As of the moment of its establishment and to date, the MicroCredit Bank has been paying close attention to financial support and provision of micro-loans to the residents of mahallas (communities) and rural villages of Uzbekistan. It is also important that the bank has managed to expand the horizons of its business and crate a competitive environment in the field of provision of microcrediting services. Today the bank has 79 branch offices, 267 mini banks and 7 agencies across the country, which provide services to over 136,000 clients.

In 2008 MicroCredit Bank extended some 92 billion soums of credit funds to entrepreneurs. As a result over 56,000 new jobs were created.

Overall, the forecasts made by the bank in the beginning of 2008 and the plan on provision of microcredit services to small businesses and private entrepreneurs were performed to 123.2%.

Sayfuddinov noted that the Decree of the President of 10 November 2008 "On measures to further expand the activity of the MicroCredit Bank joint-stock commercial bank" opened additional opportunities for stimulation of private business development. Now the interests on the soft micro-loans of the bank received from entrepreneurial activity in the amount of up to 200 minimum wages have been reduced from 5% pa to 3% pa.

Micro-loans envisaged for the expansion of entrepreneurial activity and growth of the working capital of small businesses in the amount of 500 minimum wages have been reduced from 100% to 50% of the refinance rate of the Central Bank. The interests on soft micro-leasing for the small business entities of up to 2,000 minimum wages have been reduced from 7% to 5% pa.

Thus, active work of the commercial banks of Uzbekistan on provision of financial support to small businesses helps stimulate entrepreneurial initiative and improve the living standards of the population in general.