(MENAFN- Trend News Agency) BAKU, Azerbaijan, October 23. Earlier, the European Bank for Reconstruction and Development (EBRD) approved a $5 million loan to Davr Bank, which will be directed toward subsequent lending to eligible micro-, small-, and medium-sized enterprises (MSMEs) in Uzbekistan.

The bank told Trend that micro, small, and medium-sized enterprises (MSMEs) in Uzbekistan continue to face persistent challenges in accessing finance and developing entrepreneurial skills.

A source noted that strategic partnerships with local financial institutions, such as Davr Bank, are a key component of the EBRD's approach to addressing these barriers. Through medium-term local currency loans and tailored advisory services delivered under the Advice for Small Businesses program, the EBRD facilitates outreach to underserved regions and segments.

"These collaborations are designed to promote financial inclusion, support the formalization of MSMEs, and foster sustainable, regionally balanced growth, which are fully aligned with the Bank's transition mandate and country strategy," emphasized a bank representative.

He also noted that the project is fully aligned with the EBRD's Country Strategy for Uzbekistan (2024–2029), which prioritizes enhancing competitiveness by strengthening the role of the private sector in the economy. One of the strategy's key objectives is developing the financial system and expanding MSME access to financing, especially in remote and rural areas.

"By providing long-term local currency loans to MSMEs and individual advisory services to Davr Bank clients, the project contributes to expanding the MSME portfolio, targeting more profitable clients, and strengthening financial inclusion," the bank representative added.

Regarding monitoring, the EBRD representative explained that within each transaction with Davr Bank and other Participating Financial Institutions (PFIs), the EBRD sets Transition Impact Benchmarks that reflect the Bank's mandate to foster the development of sustainable, market-oriented economies.

He noted that these benchmarks are typically aligned with the tenor of the loan and are derived from the EBRD's Transition Objectives Measurement System (TOMS), which assesses expected impact and monitors delivery through the Transition Impact Monitoring System (TIMS).

"The benchmarks are consistent with the priorities outlined in the EBRD's country strategy and are structured around the six transition qualities: Competitive, Well-governed, Green, Inclusive, Resilient, and Integrated. Active monitoring ensures that PFIs meet performance targets, thereby enhancing competitiveness and resilience in the MSME sector," the source concluded.

Uzbekistan stands as the preeminent beneficiary of EBRD capital allocation within the Central Asian region, showcasing a diversified portfolio of investments spanning from sustainable energy initiatives to financial services infrastructure. Following the strategic reengagement with the nation, the EBRD has amplified its operational footprint, now functioning through a central hub in Tashkent alongside auxiliary offices in Andijan and Urgench.

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