EBRD backs young entrepreneurs as Uzbek small firms seek credit

The financing comes as small businesses account for more than half of Uzbekistan’s GDP, but many still lack the records, collateral and support needed for loans. The European Bank for Reconstruction and Development (EBRD) is providing up to $50 million (€42.7 million) to Uzbekistan’s O’zsanoatqurilishbank, known as SQB, to expand lending to young entrepreneurs, as smaller businesses continue to face barriers in accessing bank credit. The loan is being extended under the EBRD’s Youth in Business programme for Central Asia and targets micro, small and medium-sized enterprises led or owned by entrepreneurs under 35. The focus on younger business owners reflects Uzbekistan’s demographics. The country had 9.63 million people aged 14 to 30 at the start of 2025, equal to 25.7% of the population, according to official statistics. The SQB loan forms part of two EBRD operations worth up to $100 million (€85.4 million) in Uzbekistan’s financial sector. A separate operation of up to $50 million (€42.7 million) with the Mortgage Refinancing Company of Uzbekistan is intended to support the residential mortgage market and more standardised lending practices. The financing comes in an economy where small businesses accounted for 51.5% of GDP in January-September 2025, with 1.2 million operating small business entities as of 1 October 2025, according to Uzbekistan’s National Statistics Committee. Available liquidity misses smaller firms For Francis Malige, Managing Director and Head of the Financial Institutions Business Group at the EBRD, the central problem is not only the availability of money, but where it goes. “Liquidity is certainly abundant,” he told Euronews. “What we see is that a lot of it goes to sovereign lending, to state borrowing, but not necessarily to financing the real economy.” The SQB credit line is designed to address that gap by targeting young firms that often struggle to meet banks’ lending standards. Bankability remains the first test For many smaller firms, the first barrier is not the business idea itself. It is whether the business can provide the records, financial planning and operating history that lenders use to assess risk. Malige said many SMEs face a structural mismatch with the banking system. “They do not speak to banks in a way that banks expect them to,” he said. He linked that mismatch to the way smaller firms document their business. They often have fewer financial forecasts, less formalised financial planning and lower transparency of information than larger companies. In SME lending, he said, banks also need to place more weight on the credibility of the founder, the management team and the business plan. For women entrepreneurs, the finance gap can begin before a loan application is filed. Access to credit may also depend on whether they can find information, networks and support services that make available programmes usable in practice. Ceren Güven Güres, Head of the UN Women Central Asia Liaison Office, said Uzbekistan has made significant progress on gender equality reforms, including support programmes for women entrepreneurs. But she said legal and policy changes do not automatically translate into equal access. “Are they aware of their rights? Are they aware of these services?” she said. Collateral still drives lending decisions Once a business reaches the bank, the next test is often security. Many young entrepreneurs and first-time business owners may not yet have the property or equipment needed to support 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 said. The problem also extends to how banks organise SME lending. “Many banks take SME lending as a sort of a downgraded version of corporate lending. That’s not how it should be,” he said. The EBRD says it works with both borrowers and lenders through technical assistance, training and risk-sharing instruments such as first-loss cover, which can help banks lend to clients that lack traditional collateral. Women entrepreneurs need support beyond credit For women business owners, access to finance is also shaped by conditions outside the banking system. Güres said social expectations, gender stereotypes and care responsibilities can limit women’s ability to build businesses, join networks and use 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. She said support programmes need to continue after women launch or formalise a business, with mentoring, tailored assistance, grants and loans to help firms expand beyond the first stage.