Last week, the sides signed a loan agreement on allocation of loan in line with an intergovernmental agreement on financial cooperation and a program for supporting Uzbekistan’s financial sector. The loan, allocated under guarantee of the Uzbek government, was issued for 40 years, including a 10-year grace period, at 0.75% annual interest.

The credit line will be issued to selected commercial banks for lending and microcrediting projects of small businesses and mortgage crediting.

The funds will allocated to commercial banks for 12 years, including a three-year grace period, at an interest rate equal to the 12-month UZIBOR rate for loans in national currency and 7% annually for loans in foreign currency.

In line with the agreement, the maximum amount of loan, issued to small businesses to replenish working capital and acquire fixed assets, is 200,000 euro.

Microcredits to individual entrepreneurs and farmers, working without organization of legal entity, can receive up to 10,000 euro per borrower in cash in national currency.

The Uzbek bank will allocate up to 20,000 euro per borrower in mortgage crediting in national currency. The banks will also issue up to 5,000 euro in cash for mortgage crediting for 12 years with a one-year grace period.

Since 1993, Germany allocated 293 million euros to projects in Uzbekistan through KfW.