In a move aimed at boosting youth employment, the government of Uzbekistan has announced that businesses hiring graduates from local universities will be eligible for preferential loans. This decision was outlined in a decree by President Shavkat Mirziyoyev on November 3, according to Fergana news agency.
Under the new initiative, entrepreneurs who employ university graduates will be able to secure loans of up to 5 billion sums (approximately $417,000) with favorable terms. The loans will be available for a period of seven years, including a two-year grace period. The interest rate will be set at 4% above the Central Bank's base rate, which is currently 14%, bringing the rate for entrepreneurs to 18%.
The loan amount will depend on the number of graduates hired, with at least one graduate required for every billion sums of the loan amount.
The loans are intended for projects in manufacturing, services, or for capital formation and replenishment of working capital. However, there are conditions attached: if an entrepreneur dismisses a graduate who received the preferential loan within two years, the loan's interest rate will automatically be recalculated according to the commercial rate starting from the date of the termination of the employment contract. If the vacancy is filled with another graduate within a month, the preferential terms will remain in effect.
Additionally, the decree establishes a competition for graduates with the best startup or innovation project. The winners of this contest will receive grants of up to 1 billion sums (around $83,400), on the condition that they hire at least two other graduates.
This initiative is part of ongoing efforts to address youth unemployment in Uzbekistan. Earlier this year, in February, President Mirziyoyev announced the development of a new graduate employment system, backed by a $100 million allocation from the National Bank to support the program.
The government also plans to provide preferential loans of up to 5 billion sums (approximately $385,000) for entrepreneurs who hire at least 20 employees and establish a training center. Of these loans, 30% will be specifically directed towards supporting women entrepreneurs.
In a further incentive, business owners who hire young employees with a monthly salary of at least 3 million sums (roughly $230) will benefit from a 1% reduction in the social tax. This system will be in place for the next three years.
The new policy is seen as a significant step in tackling youth unemployment and encouraging entrepreneurship, especially in sectors crucial to the country's economic development.
