Islamic Development Bank Group approves $40 million to support small businesses in Uzbekistan

As part of an agreement signed in April 2024, the IsDB will provide $30 million for the project, while an additional $10 million will come from its affiliate, the Islamic Solidarity Fund for Development (ISFD).

The bulk of the funds, $30 million, will be allocated for SME financing under the Islamic financial principle of Murabaha. Another $7.5 million will be channeled to a trade development company to provide guarantees for business loans.

Additionally, $1.75 million is earmarked for business engineering initiatives and capacity-building programs. The remaining amount will cover project management, auditing, and a reserve for unforeseen expenses.

The funding will be available for a 10-year term, including a three-year grace period. The additional cost for the IsDB loan is tied to a 10-year average swap rate plus 1.85%.

The financial resilience program, set to run from 2025 to 2027, aims to attract up to $100 million from various sources. The initiative is expected to strengthen SMEs by providing accessible trade financing and credit guarantees, ultimately fostering economic growth and development in Uzbekistan.