OVERVIEW

 

Roughly half of Uzbekistan's 37 million people live in rural areas, and roughly half of those are women. Agriculture accounts for about 17 percent of GDP and a quarter of total employment. Micro, small and medium-sized enterprises generate above 50 percent of GDP and provide three-quarters of all jobs. These statistics tell most of the story of where private sector growth in Uzbekistan must come from over the next decade. They also explain why the Asian Development Bank's agribusiness and inclusive finance portfolio has expanded sharply since the 2024 to 2028 Country Partnership Strategy was approved, with a focus on small farmers, women entrepreneurs, and the financial institutions that lend to both.

 

A MARKET BUILT ON SMALLHOLDERS

 

Uzbekistan has one of the most favourable agricultural climates in Central Asia. Most regions support double harvests of vegetables each year, with some supporting three. The country produces more than seventy varieties of fruit and vegetables across 12 regions and Karakalpakstan, and horticulture exports have become a strategic priority alongside cotton and wheat. Yet productivity remains constrained by fragmented landholdings, weak farm-to-market linkages, post-harvest losses estimated above 30 percent, and limited access to long-term finance for smallholders and processors.

 

ADB has worked on these constraints since the mid-2010s. The Horticulture Value Chain Development Project, launched in 2016 with US$ 154 million and later expanded by US$ 198 million in additional financing, channelled long-term credit through Hamkorbank, Ipak Yuli Bank, and other participating financial institutions for orchards, cold storage, greenhouses, processing equipment, and packaging facilities.

The follow-on Horticulture Value Chain Infrastructure Project, approved with US$ 197 million, is financing agro-logistic centres in Andijan and Samarkand regions which together account for 30 percent of national horticulture output. The centres consolidate trading, storage, food safety certification, customs clearance, marketing advisory services, and commercial banking in one location, addressing post-harvest losses and lifting export competitiveness in a single intervention.

 

 

"THE BINDING CONSTRAINT IS NOT A LACK OF CAPITAL.

IT IS THE LACK OF AN ENABLING ENVIRONMENT."​

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MASATO KANDA

ADB PRESIDENT

 

 

PRECISION AGRICULTURE AND CLIMATE RESILIENCE

 

The newer focus is on climate-smart productivity. The Precision Agriculture for Resilient Commercial Horticulture Sector Project, approved with US$ 3 million in grant cofinancing from the Japan Fund for Prosperous and Resilient Asia and the Pacific, targets Bakhmal district in the Jizzakh region. It supports at least 170 small-scale farmers, with another 85 agricultural workers and their families benefitting indirectly. The project supplies digital and climate-smart equipment for production, post-harvest handling, and processing, while promoting water and energy efficiency. The model is designed to be replicable: producer groups achieve the scale that individual smallholders cannot, and downstream agribusiness commits to off-take from those groups.

 

It is a small project by ADB standards. It is also a template for how Uzbek horticulture can move from subsistence to commercial scale at climate-affected margins. In March 2026, ADB confirmed it had surpassed its US$ 14 billion food security commitment to Asia and the Pacific for the 2022 to 2025 period and announced additional funding alongside expanded partnerships under a broader food systems agenda. Uzbekistan, with its strategic position in Central Asian food production and its government's commitment to agricultural commercialisation under the Uzbekistan-2030 strategy, sits inside that expanded agenda as one of its most active beneficiaries.

 

THE MSME FINANCE GAP

 

The numbers framing Uzbekistan's MSME finance challenge are direct. Of nearly half a million registered MSMEs, the IFC-McKinsey database has estimated the financing gap at roughly US$ 11.8 billion, equivalent to almost a fifth of GDP. Women-led businesses face the sharpest constraints: although they make up roughly a third of MSMEs, they have historically received only around 14 percent of MSME loans. Rural enterprises are similarly under-served, despite rural areas housing the country's youngest workforce and the highest rates of new business formation.

 

ADB's response is the Inclusive Finance Sector Development Program, structured in three sequential subprograms. Subprogram 1, approved in September 2024 at US$ 300 million, established the legal and institutional framework for inclusive finance. It addressed the policy environment, the regulatory and supervisory frameworks, and the diversification of funding sources for microfinance institutions. Subprogram 2, approved on 12 November 2025 at US$ 300 million with US$ 100 million on concessional terms, deepened those reforms.

 

It raised the maximum microloan size, modernized microfinance regulations, brought Uzbekistan into the international Women Entrepreneurs Finance Code, introduced Islamic microfinance rules, and added consumer protection measures covering "buy now, pay later" products and digital financial supervision. Subprogram 3 is scheduled for 2025 to 2027 and will focus on institutional capacity and implementation depth.

 

The structural reform that may matter most over the long run is the creation of deposit-taking microfinance banks. Subprogram 2 puts the risk-based regulatory framework in place for these institutions, which can mobilise local savings and recycle them into local lending. It also operationalises sex-disaggregated reporting and sets gender quotas for financing, giving regulators and lenders measurable accountability for the women's finance gap. An assessment carried out under the programme found that 60 percent of adults in Uzbekistan now hold an account at a formal financial institution, a figure driven largely by the rapid expansion of digital finance.

 

WORKING THROUGH THE BANKS

 

ADB's commercial bank partners do the operational work. Hamkorbank, the country's largest private MSME lender, signed a 625 billion sum loan with ADB in November 2024 (approximately US$ 50 million), with at least 20 percent earmarked for women-owned or led MSMEs, 60 percent for businesses outside Tashkent, and 10 percent for green technology investments. Ipak Yuli Bank, the fourth-largest private bank with 17 branches and 49 service centres, signed an equivalent 625 billion sum loan with ADB on the same terms in November 2024. ADB has also supported Xalq Bank's commercialisation since May 2022 through technical assistance, working to align state-owned commercial banks with international financial standards as they prepare for partial privatization.

 

The pattern is consistent. ADB conditions long-term lending on women's-finance targets, on rural disbursement minimums, and on green technology earmarks. Participating financial institutions retain the credit decisions and the customer relationships. Borrowers receive concessional terms and training. Over the past decade, the country's two longest-standing ADB partners, Hamkorbank and Ipak Yuli, have together delivered more than 10,500 new loans through earlier ADB programmes, of which 30 percent went to women's small businesses and 50 percent to rural businesses.

 

WHY THE PRIVATE SECTOR FRAME MATTERS

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In his Samarkand keynote, ADB President Masato Kanda set out the institutional logic plainly: the bank has set a target to quadruple its private sector financing to US$ 13 billion annually by 2030. "The binding constraint is not a lack of capital," he said. "It is the lack of an enabling environment." For Uzbekistan, that environment requires three layers working together: a microfinance system that reaches the unbanked across the country, a banking sector that lends to rural and women-led MSMEs on commercial terms, and an agribusiness value chain that connects smallholders with processors and the new rail corridors that will move their produce to regional markets.

 

The convergence between ADB's agribusiness portfolio and its inclusive finance programme is what makes the next five years matter. A horticulture cluster in Samarkand without long-term finance cannot scale. A microfinance reform without agribusiness off-takers leaves smallholders with loans they cannot repay. ADB's pillar 2 strategy treats them as a single private sector development agenda. By 2030, the test will be whether MSME contribution to GDP has moved above 55 percent, whether women-led businesses have closed the lending gap, and whether the country's horticulture sector has converted its agro-climatic advantage into export earnings that match its production.