Entrepreneurs Bring Jobs and Opportunity to Rural Uzbekistan

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.

With his loan, Ulugbek purchased modern bottling equipment, including advanced filtration systems that can process high-salinity water for safe drinking. He now employs 10 locals, including four women.

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.

Turning Loans into Big Opportunities

Too often, farmers and small businesses in Uzbekistan’s rural areas lack access to the capital needed to grow. The project injected much-needed financing to local agribusinesses, shops, restaurants, barbershops, aquaculture operations, and other enterprises.

In the Republic of Karakalpakstan, located in the country’s northwest, 23-year-old entrepreneur Shahzoda Fazylbekova is expanding her family’s bakery. After starting out cooking pastries at home, Shahzoda quickly realized she couldn’t keep up with demand, especially from customers in remote locations.

Her new café employs three people, two of whom are young women from the area. Shahzoda now plans to open another cafe inside a newly planned hypermarket.

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.

By providing advisory support, these incubators are helping business owners assess their models, improve marketing strategies to attract customers, and find innovative ways to produce their goods and services. The hubs also arrange field visits to successful local businesses, allowing aspiring entrepreneurs to learn from real-world examples.

Gulsara Salieva, a 24-year-old business consultant at the incubator in Nukus, works with over 50 entrepreneurs in Karakalpakstan.

The project’s transformative impact is already evident. As of December 2025, it has supported entrepreneurs by investing in more than 2,850 subprojects across the agriculture, aquaculture, construction, tourism, and rural services sectors, increasing participating enterprises’ efficiency and revenues. These efforts have also generated more than 12,000 new jobs, over half of which are held by women and young people often excluded from the labor market.