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STORY HIGHLIGHTS
- Promoting entrepreneurship is key to boosting employment and prosperity in Uzbekistan’s rural areas.
- A World Bank-funded project has reached over 15,000 micro, small, and medium-sized business owners in rural communities across the country, helping create new jobs and expand access to in-demand goods and services.
- 22 new business incubators are empowering entrepreneurs, with a focus on youth and women, to turn ideas into viable businesses and expand existing operations.
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Small businesses are the engine for job creation, innovation, and economic growth across Uzbekistan. But in the country’s rural areas, aspiring entrepreneurs face steeper obstacles turning ideas into successful ventures: limited finance, smaller markets, higher transport costs, and sparser ecosystems for networking and mentoring.
The Second Rural Enterprise Development Project, funded by the World Bank and implemented by the Ministry of Employment and Poverty Reduction, has been working to support rural micro, small and medium-sized enterprises. Since launching in July 2022, the project has reached more than 15,000 entrepreneurs nationwide, including those operating in Uzbekistan’s most economically and environmentally vulnerable areas, to establish new businesses and expand existing ones.
Through financing and advisory support, the project has helped unlock the country’s rural entrepreneurial potential—boosting employment, creating new opportunities for women and youths often excluded from the labor market, and narrowing the urban-rural divide by bringing new goods and services to remote communities.
Supporting Small Businesses Creates Local Jobs
For many beneficiaries, the project has reshaped their communities by helping them turn an idea into a new business. Ulugbek Ibragimov, a 60-year-old small business owner from Khanka District in Khorezm region, was one such aspiring entrepreneur. After receiving a loan through a local bank partnering with the project, he set up a bottled water production facility in an area struggling with water scarcity and high salinity levels.
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For other beneficiaries, the project has supported the expansion of existing operations. Rasulbek Yusupov, a 50-year-old businessman from Khanka District, specializes in manufacturing ropes. He had been running his business since 2016, but the COVID-19 pandemic severely impacted demand. Rasulbek’s sales dropped and supply chains were disrupted, nearly forcing him to shut down.
"I’m glad that with a loan from the project we restarted production, and now we have a stable rope manufacturing operation," Rasulbek relays, emphasizing that he has hired six new employees in his workshop.
Rasulbek’s ropes, which are used widely by local farmers for horticulture and livestock farming, are a cost-effective alternative to expensive imports. "Our process is zero-waste. We recycle all raw material scraps into finished products and sell them as well," he explains, underscoring his operation’s eco-friendly approach.
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Similarly, Nemat Jumabayev, a 36-year-old restaurant owner, has expanded his business through a loan received through a local bank under the project. His restaurant, previously in need of renovation, now boasts a modernized interior. Foot traffic has increased significantly, with sales growing by 50-60%.
This financial support also enabled him to expand to a second location in Nukus, Karakalpakstan’s capital, where he hired 10 new employees. “Access to financing played a key role in improving business performance and enabling the opening of a new restaurant,” says Nemat.
Business Incubators Drive Entrepreneurial Growth
Central to the project’s efforts has been the establishment of 22 business incubation hubs across Uzbekistan that provide training in financial literacy and entrepreneurial skills to participating entrepreneurs.
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