The Asian Development Bank (ADB) has approved a $100-million loan for Uzbekistan, the press service of the bank has reported.
The loan is aimed at supporting reforms in the fields of politics, legislation and institutions necessary to create a favorable and competitive environment in the financial markets of Uzbekistan.
“As Uzbekistan accelerates its transition toward a market economy, robust and competitive domestic financial markets are essential for mobilizing private investment,” said ADB Director General for Central and West Asia Yevgeniy Zhukov. “ADB will help develop financial markets in Uzbekistan and stimulate private investment-a key driver of economic growth and an important source of new jobs in the country.”
ADB’s Financial Markets Development Program is to support reform measures to deepen and broaden Uzbekistan’s financial markets. It seeks to promote a more liquid government bond market and diversify the investor base. The program will also help develop critical market infrastructure, including surveillance systems and enhance the supply of alternative financial instruments such as exchange-traded funds.
“The program will help reduce systemic vulnerabilities in Uzbekistan’s financial system through diversification away from a predominantly bank-based system of financial intermediation. It will promote the development of the corporate securities market, enhance demand from institutional investors such as insurance companies, diversify the financial instruments available, and broaden the investor base,” said ADB Principal Financial Sector Specialist Syed Ali-Mumtaz H. Shah. “By strengthening governance of the financial markets, the program will enhance market efficiency and improve investor protection.”
“The program will play an important role in enabling investors to gain access to alternative investment opportunities and helping raise funds cost-effectively,” added ADB Principal Public Management Economist Cigdem Akun. “This will help Uzbekistan diversify its financial system and advance toward its socioeconomic development objectives.”
ADB will provide a $500,000 technical assistance grant to support key reform actions under the program. (Uzreport/Business World Magazine)