In Uzbekistan, state banks will gradually stop providing credit to large state enterprises. President Shavkat Mirziyoyev announced this during a meeting with entrepreneurs in Nukus on August 20.
Credits given by state banks amounting to 92 trillion UZS or 30 percent are allocated to 10 large state enterprises. At the same time, large enterprises are being transformed, independently entering financial markets, and being taught to attract funds on their own.
For instance, "Uzbekneftegaz" and "Uzautosanoat" have issued eurobonds worth over 1 billion dollars each. The Navoi mining and metallurgical combine is also preparing to issue its own bonds abroad.
The President announced a gradual withdrawal from the practice of allocating state funds to large enterprises.
This funding will be reduced by at least 40 percent within two years. Banks will redirect at least 30 trillion UZS to the private business sector from these funds.
Currently, many exporters are supplying products to large foreign trading networks with a payment delay of 3-4 months.
For continuous production, enterprises need more working capital. However, not every entrepreneur has the opportunity to obtain a new loan or find collateral for it.
The most convenient instrument that does not require collateral from the entrepreneur is – factoring. According to the International Finance Corporation, there is a demand for factoring services worth 10 billion dollars in our country. Currently, only banks and microfinance institutions are offering this service.
From now on, the path will be open for a new institution other than banks – factoring companies, which can also offer services in foreign currency. A separate electronic platform for banks, microfinance, factoring organizations, and entrepreneurs participating in this process will be launched. This means, entrepreneurs will be able to choose the financial product that suits them.
Overall, by promoting factoring, entrepreneurs for working capital will gain an additional financial resource of 20 trillion UZS, and export companies will gain 1 billion dollars.
In a recent survey, 38 percent of entrepreneurs expressed their desire to obtain resources based on Islamic finance.
Last month, microfinance institutions were authorized to offer services based on Islamic principles.
If the proposed new bill is passed, banks will also be able to operate under Islamic finance.
This – will stimulate the provision of new financial services, attract many investors, and generate an additional resource of 5 billion dollars.
