Uzbekistan is making strides in transforming its small and medium-sized enterprises, which are vital to the country’s economy, contributing nearly 50% to the national gross domestic product and providing employment for 80% of the workforce, especially in rural areas. However, many of these businesses face challenges with cash flow due to long payment delays, ranging from 13 to 120 days after delivering goods and services. These delays often lead to closures, not due to operational weaknesses, but due to an inability to manage cash flow effectively.
In response, Uzbekistan has launched an innovative supply chain finance program aimed at supporting these small and medium-sized enterprises. The initiative is designed to improve cash flow by using modern financial tools like factoring, which allows businesses to sell their accounts receivable to third parties at a discount in exchange for immediate cash flow. This solution will help businesses overcome financial difficulties, enabling them to continue operations without the need for significant collateral.
Additionally, the program will introduce a sophisticated digital platform to support the finance ecosystem. The platform will promote better collaboration, transparency, and automation, offering real-time transaction monitoring, enhanced risk management, and deeper insights into financial flows. This technological solution will help businesses access crucial financial resources and better manage their supply chain operations, allowing them to thrive in a competitive global market.
Uzbekistan’s forward-thinking approach to supply chain finance serves as a model for other developing nations, showing how financial tools and digital solutions can create a more resilient and dynamic small and medium-sized enterprise sector. By enhancing the financial capabilities of these businesses, Uzbekistan is laying the foundation for sustained economic growth, job creation, and a more integrated supply chain that supports both local and international trade.
This transformative initiative will not only boost the growth of small and medium-sized enterprises but also contribute to Uzbekistan’s long-term goal of becoming an upper-middle-income country by 2030, offering a blueprint for other nations seeking to empower their economies through modern financial solutions.
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