Textile companies to be granted preferential loans for purchase of cotton

Shavkat Mirziyoyev approved a new type of preferential loans for textile enterprises and cotton-textile clusters. The presidential decree was published in the Lex.uz database.

The funds are planned to be provided for the collection of raw cotton grown by farmers in excess of that sold under futures contracts. The proposal was put forward by the Republican headquarters to ensure transparency in the procurement and sale of cotton.

The maximum loan amount will be 20% of the cost of purchased raw cotton. Loans will be issued at 10% per annum (including 2% bank margin) for 10 months.

The grace period for the loan will last 3 months. Over the next 7 months, the borrower will have to repay the funds in equal installments.

In addition, textile manufacturers will have access to credit resources allocated for cotton harvesting. The money will be provided at the same preferential rate for a period of one year with a 3-month grace period.

In July, the head of state issued a decree on improving the financial situation in the cotton-growing sector. The deadline for repaying the remainder of the preferential loans taken by cotton suppliers for the 2023 harvest was extended until April 2025.